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Domestic Investors Push Transaction Volume to Another Annual Record of RMB 209 Billion in 2016
SHANGHAI, 17 January 2017 – For the full year 2016, transaction volumes in China reached a record RMB 209 billion, an increase of 52% y-o-y. Following a slow first half, the market saw a recovery towards the end of the year, with 4Q16 transaction volume reaching RMB 91 billion, which was a 45% q-o-q increase and a 36% y-o-q gain. Johnny Shao, Head of Capital Markets for Shanghai and East China, said: "This transaction volume was largely supported by domestic Chinese buyers who - in addition to aggressively pushing into overseas markets - have also stepped up their activity in key Chinese markets like Shanghai and Beijing." Chinese investors accounted for more than 86% of transactions in China this year, up from about 75% in the past few years.
In terms of asset types, office continues to dominate the investment market in China in 2016 with a total of RMB 114 billion transacted (21% y-o-y gain), which represents 55% of total. Retail space was the second most sought after assets, with a total of RMB 41 billion transacted, with translates to a 70% y-o-y increase. Thanks to strong online and e-commerce sales, also worth noting is a huge increase of industrial and warehouse demand, as total transactions in 2016 reached RMB 18 billion, which is a ten-fold increase y-o-y.
Shanghai remains the top investment destination in China in 2016. Shanghai continued to dominate the China's property investment market this year. "Total transaction volumes in the city reached RMB 100 billion, accounting for 48% of China's total investment volume." said Johnny Shao. Beijing was the runner-up, accounting for 16% of all the transaction volume in 2016, while Shenzhen came in third, reaching 10% of the total. The Shanghai office sector accounted for 68% of all office transactions and remained the clear winner in the investment market in China as most potential buyers - most notably domestic players - continued to see Shanghai as a strong long-term investment environment.
Fourth quarter sees Shanghai's largest single asset deal on record. The largest transaction in 2016 was Shanghai Century Link's RMB 20 billion purchase by a joint venture of ARA Asset Management and mainland insurer China Life, a deal which also set an all-time price record for the purchase of a single asset in Shanghai. In the office segment, the second largest transaction in 2016 was China Jinmao's sale of Shanghai International Shipping Institute Building to China's State Development Investment Corporation (SDIC) for RMB 5.3 billion price tag, while SOHO China's sale of SOHO Century Avenue to Guohua Life Insurance came in third at RMB 3.2 billion. In the retail space, JLL was responsible for the largest transaction in 2016, as Chongbang Development conducted an 80% equity stake buyback of Shanghai's Jinqiao Life Hub for RMB 5.5 billion. In addition, among portfolio deals, Legend Holdings' RMB 13.8 billion was the largest transaction in 2016, followed by COFCO's sale of its Joy City portfolio for RMB 9.3 billion.
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JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. A Fortune 500 company with annual fee revenue of $5.2 billion and gross revenue of $6.0 billion, JLL has more than 280 corporate offices, operates in more than 80 countries and has a global workforce of more than 70,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 4.0 billion square feet, or 372 million square meters, and completed $138 billion in sales, acquisitions and finance transactions in 2015. As of September 30, 2016, its investment management business, LaSalle Investment Management, has $59.7 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, www.jll.com.
JLL has over 50 years of experience in Asia Pacific, with 36,000 employees operating in 94 offices in 16 countries across the region. The firm won 15 awards at the International Property Awards Asia Pacific in 2016 and was named number one real estate investment advisory firm in Asia Pacific for the fifth consecutive year by Real Capital Analytics. www.jll.com/asiapacific
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