DTZ Property Times Dalian Q4 2010_ENG

Property Times Dalian Q4 2010

Office market continues to thaw out

Economic overview

During the first three quarters of 2010, Dalian’s economy was steady and registered relatively fast growth. The city’s GDP grew in real terms by 16% year-on-year (y-o-y) to an aggregate value of RMB366.9bn (US$55.173bn). In particular, Lushunkou district and Jinzhou New district experienced faster economic growth.

In the year to October, aggregate value contributed by above-scale industries in Dalian reached

RMB182.57bn (US$27.454bn), an increase of 24.2% y-o-y (Table 1). Industrial production grew steadily, sustaining a slight recovery momentum.

Fixed asset investments (FAI) also registered faster growth, continuing the shift in economic structure towards primary and tertiary industries. For the year ending October, FAI climbed 34.8% (Table 1) from a year ago to a total value of RMB326.78bn. Of this amount, real estate investment increased 36.8% y-o-y to RMB58.12bn (US$8.74bn).

Between January and October, Dalian’s service sector accelerated at a faster pace, having successfully attracted a total of US$5.72bn in realised foreign direct investment (FDI). That

translates into an increase of 33.2% y-o-y, or 31.6 percentage points higher than that of Liaoning

province. Over the same period, realised FDI in the service sector grew 90.2% y-o-y to a total of

US$4.32bn, accounting for 75.5% of the total amount for Dalian, or 22.9 percentage points higher than the growth posted during the same period a year ago.

Table 1

Economic indicators

Change Indicator

Period

Unit Value

y-o-y (%) GDP

Q1-Q3 RMB 100 3,669

16

million Added value of above-scale RMB industries Jan-Oct 100 1,825.7 24.2

million Disposable income per capita of urban Q1-Q3 RMB 15,773 11.2

households US$100 FDI utilised Jan-Oct million 57.2 33.2

Fixed asset RMB investment Jan-Oct 100 3,267.8 34.8 million Consumer price index

Jan-Oct

-

102.1

2.1

Source: Dalian Municipal Bureau of Statistics

Offices

Futures Building was fully completed and is now ready for occupation. This completion injected a further 96,508 sq m of floor space into the grade A office market. By the end of 2010, total inventory had climbed to 470,257 sq m (Table 2).

In Q4, the market posted a stronger rebound thanks to a steady growth in occupier demand. Overall availability ratio in the market dropped by 0.7

percentage points q-o-q to 19.3%, a decrease of 2.4 percentage points y-o-y (Table 2). Absorption has reached 80,305 sq m, driving the total absorption for 2010 to a historical high of 86,800 sq m (Figure 3).

With a larger pool of rental stock, the submarket of Qingniwa Bridge district has fared better than other areas in terms of transaction volumes. Its availability ratio dropped by 3.8 percentage points, from 18.2% in Q4 to 14.4%, and net absorption reached 6,530 sq m. New office stock in the Xinghai Bay area offered a wide selection to occupiers, while the area had a

higher transaction volume. Apart from anchor tenants Dalian Commodity Exchange and its affiliate

companies, the submarket has also attracted other occupiers, pushing the area’s occupancy rate to a record level.

Prime rents in the Renmin Road submarket showed a slight decline as a result of limited supply. The availability ratio dropped slightly to 11.5% and the demand for grade A space in DDA fell slightly this quarter (Table 2).

Driven by the market recovery and leasing activity of high-quality space, average rent of grade A offices grew rapidly in Q4, reaching RMB97.6 (US$14.68) per sq m per month, an increase of 10.4% q-o-q (Table 2). Occupier demand from both domestic and foreign companies has also increased (Figure 2). Looking forward, we believe that activity will continue to heat up and that rents will continue to grow with the improving economy.

In 2011, new stock in excess of 100,000 sq m of floor space is expected for the Xinghai Bay submarket. A rise in supply will inevitably exert an upward pressure on the availability ratio, but we are optimistic that

absorption will keep up with supply growth (Figure 3).

Recent transactions

Bosch leased 600 sq m of space in Senmao Bldg.

Davis Langdon & Seah Consultancy took up 361 sq m in Xiwang Tower.

Table 2

Grade A office market statistics

Total Rent Rent District

stock Availability (RMB/ change (sq m) ratio (%)

sq m/ q-o-q month ) (%) Renmin Road 172,086 11.5 72.5 0.4 Qingniwa Bridge 171,441 14.4 109.5 1.8 DDA 30,222 73.8 71.2 0 Xinghai Bay* 96,508 24.8 129.3 -- Overall

470,257

19.3

97.6

10.4

*Xinhai Bay is the business district newly formed this quarter Source: DTZ Research

Figure 2

DTZ office index (2005 - 2015F)

Source: DTZ Research

Figure 3

Grade A office supply, net absorption and availability ratio (2005 - 2012F)

GFA, thansand sq m

Availability ratio

1201008060

40200

2005

2006

2007

2008

2009

2010

2011F2012F

New supply

Net absorptionAvailability ratio

Source: DTZ Research

Retail

In Q4, Dalian’s retail market saw steady growth, largely driven by the holiday shopping mood during the Mid-Autumn Festival and National Day holidays. In the year to October, total retail sales of consumer goods grew 18.2% to RMB134.46bn (US$20.22bn) from a year ago (Figure 4).

As this quarter is the traditional peak season for the retail sector, occupier demand for prime retail space remained strong, while most of the shopping malls, such as Peace Plaza, underwent majo …… 此处隐藏：13122字，全部文档内容请下载后查看。喜欢就下载吧 ……