Investment appetite for office assets remained strong in Shanghai in the first quarter of this year while retail and logistics properties would also draw growing attention from investors, major international real estate services providers said.
Four key real estate deals valued at a combined 4.3 billion yuan ($662 million) were concluded during the three-month period, with decentralized office accounting for 55 percent of total sales consideration, global property advisor Savills said in its latest quarterly report. Serviced apartments took the remainder.
"Domestic investors played an active role at the beginning of this year, concluding three deals that took up more than 80 percent of the total value," said Chester Zhang, associate director at Savills China Research. "Looking forward, retail and logistics segments are expected to see more portfolio and platform deals, as international investors want strategic interest in these sectors."
Leading international property consultancy JLL also saw continuously robust demand for Shanghai office assets.
"Domestic capital, benefitting from looser regulation and greater access to financing instruments, is seeking stabilized office assets not only in the CBD area but in decentralized and business park locations as well, with a focus on high-quality properties with stable rents," said Johnny Shao, head of capital markets for JLL Shanghai and East China. "Moreover, in the retail sector, both foreign and domestic institutional investors are expected to show greater interest for portfolio deals than single asset transactions while interest in logistics sector will continue to be seen with entity-level deals remaining the sector's major investment activity rather than en-bloc transactions."
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