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• Office – Net absorption is on the rise• Logistics – Opportunity still abounds in the logistics market• Retail – Nanjing Road and Binjiang Avenue continue to reposition• High-end Residential – Demand and prices are trending upward
High-end Residential – Prices continue to riseThe high-end residential sales rate increased 7 percentage points q-o-q, with approximately 1,250 units sold in 3Q13. Although the total number of units sold grew 23.8% q-o-q, units sold fell 15.9% compared to the third quarter high of last year. During 3Q13, units sold outpaced newly launched units, indicating that there is a healthy amount of demand in the high-end residential market. Approximately 1,000 units from seven high-end projects were released to the market in 3Q13. Of the seven projects, Glorious Palace and Yanlord Riverside Garden were amongst the most popular, together selling almost 200 units. Other projects that had high levels of sales activity were COFCO Avenue, Legendary Achievements and Glorious Palace; each sold more than 100 units. Helping to boost sales during the quarter was the “Golden Week”, which is a traditional period of increased home buying. The rise in activity during 3Q13 caused home prices to grow 2.1% q-o-q to RMB 21,800. This is the largest quarterly growth since the government began to implement policies to suppress residential home prices. The fact that home prices are only growing by around 2%, as opposed to the double-digit quarterly growth seen in the past, signals that the government policies to control housing prices are working. Michael Hart, Managing Director at Jones Lang LaSalle, said, “We are bullish on the long-term prospects of the housing market, as higher urbanization rates, rising incomes and continued strong demand are providing a strong foundation for growth in the housing market.” In 4Q13, the sales rate in the high-end residential market is forecast to rise by 14 percentage points to 49.4%. Even as more units are sold in the housing market, the overall price of housing is expected to remain stable, only increasing slightly quarter on quarter.
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