Categorized | International

China’s Commercial Real Estate Market Sees Growth

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While the Chinese residential real estate market continues to feel the effects of the national government’s property restrictions, the commercial real estate market is starting to heat up. Economists believe that the two major cities of Shanghai and Beijing will experience a tremendous boost in commercial property sales in the coming months.

 

The anticipated large increase in sales will likely be fueled by office and retail building sales. Many property developers are looking to unload their commercial properties so as to focus on future housing projects.

 

Many developers in China have struggled to stay afloat due to the property restrictions, and have no choice but to sell their commercial real estate assets if they plan to stay in business long enough to weather the current storm.

 

By selling their office buildings and retail space, Chinese property developers are generating much needed capital. They have shifted their focus temporarily so as to circumvent the limits in place on home sales.

 

Home sales in China continue to drop at astounding levels. Residential real estate developers recognize the writing on the wall, and for that reason, many are changing their business model to focus more on the commercial end of property sales.

 

During the first quarter, sales were down by nearly twenty percent. Prices hit a fourteen-month low during the month of April.

 

While developers are selling their commercial properties to bring in more capital at this point in time, many economists are advising against such a strategy, as developers would lose money in the long run. With that said, many developers are just trying to figure out how to get by on a daily basis as opposed to thinking about potential profits.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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