Beijing sees rapid growth in commercial property deals, fuelled by big spenders

Beijing became a star performer in the commercial property investment market in the last quarter with a 50 per cent jump in completed big-ticket transactions.

Six en-bloc transactions – sales of multiple units to one buyer – with a total value of US$5.1 billion were completed by institutional investors in the Chinese capital in the first three months of 2019, according to global real estate services firm Colliers.

The 50 per cent rise from the previous quarter dwarfs the 8 per cent increase in Shanghai. But in terms of absolute volume Shanghai still led the way in Chinese cities,with 14 deals totaling US$9.6 billion in the first three months.

The increase in Beijing was driven largely by a giant deal in which developer Sunac China Holdings bought a portfolio of properties from the debt-laden China Oceanwide Holdings Group for US$7.2 billion, including debt. The Beijing part, valued at US$3 billion, is a 668,500-square metre development site outside the city’s east fourth ring road.

“Sunac’s acquisition alone accounted for 59 per cent of the total transaction value. Domestic investors still dominate the market but foreign investors have paid great attention to the market since the second half of last year,” said Charles Yan, managing director for North China at Colliers.  

The second largest deal of the period was a consortium of global funds that spent US$1.3 billion on two underused towers in the city’s ZGC innovation zone, dubbed China’s Silicon Valley. That was followed by online retail giant JD.com’s acquisition of a hotel in the same area from Beijing Capital Group for US$400 million.