Chinese commercial real estate sales have increased in the first half of the year, recording more sales that the US and UK markets combined. Global commercial real estate sales are expected to continue growing in the second half of the year, which analysts believe will be the first step to global economic recovery. See the following article from Property Wire for more.
Not only is the Chinese residential property market soaring, but now the latest figures show that the country's commercial real estate sector is performing above expectations too.
China outpaced the US and the UK combined in commercial property sales in the first half of the year, according to a report from Real Capital Analytics.
China's transactions totalled US$31.2 billion following a surge in sales of land development rights after the Government eased credit terms, according to RCA.
US sales were US$16.2 billion in the first half, according to the report, and the UK's were US$13.7 billion.
'There's no question that China will be a more significant player on the world stage for commercial property transactions versus other Western countries,' said Dan Fasulo, Real Capital's managing director. But he questioned whether such strong growth was sustainable.
About US$62.8 billion of commercial properties were sold during the second quarter of 2009, some 17% more than in the previous three months and the first increase in 18 months, the report from the New York based research company found.
Analysts said that sales growth is the first step toward a global recovery. The first half's total sales were US$116.4 billion, some 65% less than a year earlier and US$500 billion below the market's peak in the first half of 2007.
They said that countries that receive the most financial support from their governments will recover faster. For example, in China, real estate investors took advantage of looser borrowing terms to buy the rights to develop buildings on state owned land, Fasulo explained.
The growth is confirmed by figures from the National Bureau of Statistics of China which show that the amount of office space sold in the country rose 13% in the first seven months of this year, while sales of property for commercial uses gained 22%.
Sales in the second half of 2009 are expected to continue rising as investors believe that the economy has bottomed out, clearing some of the uncertainty in the markets, according to Lee Hing Yin, Colliers' director of research of East China.
The report also points out that China is now spending 92% of the amount being spent in the first half of 2007 compared with just 6% in the US. And it warns that the growth in transactions is only a first step in the recovery process with pricing and operating fundamentals still in decline.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.