Block trade investments in Beijing property to see more competition
Foreign and domestic capital will confront fiercer competition in the block trade investment market in Beijing's real estate segment, driven by the many urban renewal projects in the capital, a report showed.
The total transaction value of the local block trade investment market reached a record high of 56 billion yuan ($8.13 billion) in 2018, according to a report released by real estate service provider Cushman & Wakefield Wednesday.
About 30 percent of the investment amount came from foreign investors, including Munich-headquartered insurer Allianz SE and private equity firm Partners Group from Switzerland, showing their growing interest in the segment, it said.
"In 2019, foreign capital will continue to compete with domestic investors for premium real estate in Beijing," said Liu Bing, deputy managing director of Chinese capital markets of the company. "The transactions will remain active."
The capital city is working on the renovation and upgrading of old buildings on the way to modernization, which attracted investment from many banking, insurance, and technology, media and telecommunications (TMT) companies, the report said.
Tongzhou and Lize, two suburban areas of Beijing under massive renovation, will become a new growth engine for the block trade market next year, Liu added.
Beijing is relocating administrative departments to the Tongzhou district, in a bid to ease traffic problems and population density in the city center. The 13 office buildings in Tongzhou will complete construction during 2020 to 2022, the report said.
Beijing Lize Financial Business District will have 1.08 million square meters of office space waiting to be rented in the following three years.
From October to December, the vacancy rate of Grade A offices in Beijing was 8.1 percent, a slight growth of 0.2 percentage points over the previous quarter, it said.