Page 10 - Forterra

08 ANNUAL REPORT 2012
CHAIRMAN’S STATEMENT
Liquidity for the real estate sector remained tight during
2012 as bank lending focused on state owned enterprises.
The residential market remained rather mute, much to the
government’s satisfaction. Owner-occupier ownership
is now estimated at 90.0%, being above the 80.0% level
estimated in 20097, providing the authorities with some
degree of success in their attempts to cool China’s
residential sector. China’s private housing stock increased
by 2.0% during 2012 and the average sales price increased
8.7% to RMB 5,430/square metres. However given the
overall sentiment, capital investment in the residential
market softened in 2012 to year-on-year growth of 11.4%,
down from 30.2% in 2011. However it is to be noted that
in March 2013 the government gave strong indications of
its commitment to ensuring the residential housing sector
remained stable.
The office and retail real estate markets in Shanghai
performed solidly during 2012. Whilst vacancy in the
office sector expanded moderately from 6.3% (Dec 2011)
to 7.8% at the end of 2012 average rents increased from
RMB8.82/square metres/day to RMB9.01.8 It was a similar
outcome for the retail market and whilst vacancy in the
prime sector finished the year at 4.3% up from 3.1% in 2011,
rents increased by 4.1%.
7 CLSA 7 January 2013
8 Jones Lang LaSalle
Shanghai Office Market Outlook
Shanghai Retail Market Outlook
0
2
4
6
8
10
12
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4
RMB/sqm/day
Puxi Pudong
2006 2007 2008 2009 2010 2011 2012
0%
5%
10%
15%
20%
25%
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1 Q2Q3Q4Q1 Q2Q3Q4Q1 Q2Q3Q4Q1 Q2Q3Q4
Puxi Pudong
2006 2007 2008 2009 2010 2011 2012
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4
0
10
20
30
40
50
60
RMB/sqm/day
Vacancy (RHS) Face Rent
2006 2007 2008 2009 2010 2011 2012
Office Rents – Puxi vs. Pudong
Vacancy – Puxi vs. Pudong
Prime Retail Rents Index and Vacancy
Source: Jones Lang LaSalle
Source: Jones Lang LaSalle
Source: Jones Lang LaSalle