Riding the Investment Wave
Exploring Commercial Real Estate Opportunities in Beijing
The idea of rising as a truly liveable world city is no longer a pipe dream for Beijing, but the path forward is nonetheless riddled with challenges. Against the backdrop of a slowing economy and a mountain of debt at home, escalating trade war tensions between the US and China threaten market stability and have far-reaching implications. Yet despite serious bumps in the road ahead, with mounting pressures creating much bigger hurdles than before, now is not the time to shy away from investment opportunities in Beijing, when we consider the market within a commercial real estate context.
In our paper, we begin by charting the course of the current policy environment in Beijing, before taking a closer look at the investment market over the last decade. We conclude with key survey findings from major investors, highlighting various approaches and targets being employed in the market. It is our hope that this report serves as a useful guide and handy reference for investors considering plays in the Beijing commercial real estate market.
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In recent years, a series of tightening policies have increasingly limited core supply, resulting in an unexpected window of opportunity for conversions in the market. Understanding the dynamics of how this came to be – and is set to continue – will equip investors with the background information required to make well-informed decisions. In tandem with supply-side policy changes, authorities have also been tugging on demand-side strings. This is to help assure that supply-tightening policies support decentralisation within Beijing, and eventually, beyond.
Long serving as an attractive market to investors, Beijing is uniquely positioned at the helm of the nation with strong fundamentals and a healthy market that supports a wide range of sectors, making it full of opportunities. Nevertheless, we do see a limited number of transactions in the city due to the nature of the Beijing investment market.
The investors are the actual players responsible for pushing the market forward in a real way. Their expectations – right or wrong, if they can be judged – will absolutely influence their behaviour and actions in the market. The larger point of our survey is not just for us to know more about investors, but rather to allow them to improve their understanding of one another. With this increased awareness, our aim is to help investors – as an entire collective – make better-informed decisions going forward.
Head of Research, North China
Head of Capital Markets, North China
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