Chinanews.com, Wuhan, October 14 (Reporter Liang Ting) Jones Lang LaSalle released a report on the 14th showing that Wuhan's commercial real estate market rebounded in the third quarter of 2020.
Among them, the number of office leasing transactions nearly doubled compared with the first half of the year, but the impact of the epidemic on the demand side has not yet ended, and the performance of sub-sectors is divided.
According to data, as of the end of September, Wuhan’s Grade A and Grade B projects totaled 6.042 million square meters, of which the volume of Grade A office buildings was the same as the previous quarter at 2.168 million square meters, and the volume of Grade B office buildings increased by 3.7% from the previous quarter. 3.874 million square meters.
Affected by the new supply, the city's vacancy rate increased by 1.3 percentage points from the previous month to 38.5%.
From the perspective of industry segmentation, in the third quarter of Grade A office buildings, the technology and new media industry continued to be the beneficiary industry under the influence of the epidemic, and the financial industry still showed resilience. The above two industries contributed more than half of the transaction area. This is followed by real estate and construction and professional services.
The landlord provided more flexible lease conditions, and the rent continued to decline.
According to the report, the current pressure on property owners to sell has increased sharply. The pressure mainly comes from two aspects: First, under the impact of the epidemic, the overall demand is very weak compared to previous years; second, the new round of supply peaks starting in the second half of 2020 are approaching. The market structure of oversupply will become more unbalanced, especially the active pre-leasing of some future projects, leading to more intense market competition.
In this context, landlords are more willing to provide flexible lease conditions in order to achieve decentralization, including providing longer rent-free periods and more competitive rental prices.
As of the end of September, the net effective rent of office buildings in Wuhan was 79 yuan per square meter per month, a decrease of 2.7% month-on-month and a year-on-year decrease of 7.0%.
Among them, the net effective rent for Grade A office buildings was 97 yuan per square meter per month, a decrease of 3.6% month-on-month and 7.7% year-on-year, which was the first time since 2013 that it fell below 100 yuan per square meter per month.
Thanks to the already more attractive rents, rents in the second-tier market experienced a smaller decline. The net effective rent was 68 yuan per square meter per month, a decrease of 1.9% from the previous month and 6.5% from the same period last year.
Jones Lang LaSalle predicts that in 2021, the Wuhan office market will welcome a number of high-quality projects into the market, and market competition will be fierce by then.
However, the new supply will gradually fall after 2021, and the market supply-demand relationship will be repaired.
As for the high-quality retail property market, the overall consumption of the city has further recovered. The resumption of classes in colleges and universities has driven the recovery of corresponding market segments. For example, the Optics Valley and Jiedaokou commercial districts, which are one of the main customer groups of college teachers and students, the vacancy rate decreased by 5.3% and 1.7% respectively from the end of the previous quarter. At the same time, tenants in catering, fashion and lifestyle businesses supported demand in the third quarter. (Finish)