“the increase in investment in real estate development is declining, and this year it will decline sharply.” however, in terms of growth rates, “business and writing buildings continue to rise”. In recent days, zhiqiang has expressed himself in a forum。
In fact, journalists have been informed by various authorities that in recent years the market for front-line city writing buildings has continued to expand. In beijing, for example, the vacancy rate in the city-wide writing building market was 23 per cent in mid-2008 and had dropped to 4. 8 per cent by the end of 2014, the lowest in the country. This means that the vacancy rate has fallen by over 18 per cent over five years。
It is noteworthy that, according to a fact-finding survey conducted by the daily securities journal, a developer in beijing learned that he sold his writing building at a low cost of less than $60,000 per square metre. At the same time, the developer returned rents up to 7 per cent of the year before the buyer bought the house。
In response, the salesman of the princely house disclosed to the daily securities journal newspaper that “the company, in order to quickly return the funds, gives investors some 20 per cent of the proceeds and leaves room for appreciation in order to quickly digest the inventory”
I'll sell the house to get the money back
In recent days, a reporter from the daily securities journal visited wang jie street and found that sales began on more than three floors of the national building, located at the north entrance of business street. According to sales personnel, the project covered property at the wang poi station on line 8 of the subway and entered the market at low prices in the second half of 2014. “the average sale price of the project is around $60,000 per square metre, which is currently the only sales-type writing building in the business area of wang ji.” salespersons of the house informed the daily securities journal that developers could now give home buyers a one-year rent return of 7 per cent。
In short, “the buyer now buys the house and the developer can provide a one-year return on the rent before delivery. In the case of total housing, for example, 10 million yuan, the developer will be chartered in the form of a monthly refund, and the purchaser will receive a guaranteed income of 700,000 yuan a year. This is more than 4 per cent higher than the return of $10 million placed in the bank for one year。
In response, journalists were exposed to the low supply of commercial goods for sale in the east two circle business zone, with small-house buildings divided into approximately 60 square metres of small-scale office property less commonly, combined with a larger world-class brand size and high human flow in the business circle, and relatively low start-up and sales unit prices for the project in the same region, providing investors with some room for appreciation from an investment perspective。
“this building has a lower gross package price and a relatively lower investment threshold, with a start-up price of less than $4 million. “the above-mentioned salesman argues to journalists that, in terms of return on investment, the building has both rental and value-added gains. In a 100 square metre household, the total price is about $6 million, 7 per cent of the annual rental income is about $420,000, and with 20 per cent of the annual value-added gain of $1. 2 million, the annual investment returns are around $1. 6 million。
The salesman of the above-mentioned project stated to the newspaper: “the value-added of the properties of wang jii students is 15-20 per cent per annum, the annual return is more than 7. 9 per cent and the overall return on investment is 27 per cent.” more importantly, the developer will return $420,000 in risk-free rental income a year during the development of the project until the time of delivery。
However, in the context of reduced vacancy rates, why does the developer have to be so eager to sell
“our projects are small in volume, with a total value of only $650 million, and the company's eagerness to return the funds to expand its own property in 2015.” according to the developer of the riyai building in wang jia。
The industry questioned whether wang jia, a traditional business district in beijing, had such a potential for appreciation
Beijing's building rent is spinning
In 2014, against the backdrop of a nationwide decline in the residential market and the continued weakness of the market, the beijing writing building market turned upside down and rent levels remained at high levels. According to incomplete statistics from the authorities, a total of 16 large rentals of over 10,000 square metres were recorded in the beijing building market in 2014。
“in the traditional business areas, the rents of the cbd and east changan street increased by the largest percentages, with rent levels increasing by 0. 6 per cent and 0. 5 per cent, respectively, as of the fourth quarter of 2014. “senior manager of the research department of first temple davis stated to the journalists that financial street remained the highest rent area, with an average rent of rmb 518. 0 per square metre per month.”
According to dong moon, since project owners located in traditional areas continued to have relatively strong bargaining power, the rent ratio of the beijing-class a buildings had increased by 0. 5 per cent to rmb 317. 1 per square metre per month, an increase of 2. 2 per cent over the same period by the end of 2014. In addition, in view of the general stability of demand, the rent of the cbd in beijing increased by 2. 8 per cent per annum to rmb 363. 4 per square metre per month by the end of 2014。
In response, in a study, sbong weiss indicated that, following the 2008 global financial crisis, the average annual supply in the beijing writing building market was only about 240,000 square metres. In mid-2009, the vacancy rate in the beijing writing building market was 23. 0 per cent. By the end of 2014, the vacancy rate in the beijing-wide writing building was 4. 8 per cent and the vacancy rate was reduced by more than 18 per cent. According to the beijing writing building market brief for the third quarter of 2014, as of the end of the third quarter, the cost of rent per square metre per month in the east two circle business area, located in lisheng house, was approximately $367。
According to wang joan, research director for the northern district of first taiping davidshua, the net absorption of the beijing write-up building industry throughout 2014 cumulatively reached 394,000 square metres, the highest in almost three years, nearly seven times the rate in 2013。
On the supply side, mr. Weiss argued that, while the overall supply constraints in the beijing market would ease in the coming years, the vacancy rate would remain below 5 per cent for the foreseeable future。
At the same time, the overall demand in the beijing writing building market will remain robust, supported by a multiplicity of industries. Financial institutions, business services and consulting firms have been a major source of demand for the beijing writing building market。
As the above-mentioned salesman of the royal court of irisheng building revealed to the press, “our project has now been sold on two levels, with the main client group being investment-oriented customers, while some of its own clients are generally state business collaborators, finance, aviation, and e-commerce
“in 2014, financial, it and high-tech and professional service enterprises continued to lead demand, accounting for 55 per cent of total turnover, while manufacturing demand fell from 13 per cent in 2013 to 5 per cent in 2014。
Others argue that, in the short to medium term, first-line cities will remain the most attractive market for investment compared to second-line city writing buildings, and that the continuing demand and relatively small future supply pressure from third-tier industries for their steady development, and will continue to push up rent levels in the future, as well as ensuring that the return on investment in first-line city writing buildings will increase significantly over a period of one to three years, which will help to generate significant rent gains throughout the investment period, as well as higher asset prices。
