Page 95 - ar2012

INDEPENDENT MARKET STUDY (BEIJING & SHANGHAI)
BY JONES LANG LASALLE
3. Rental
As a result of the current strong demand and relatively limited
new supply, the average rent of Business Park has been on the
rising trend since 3Q09 and achieving RMB 3.08/sqm/day as at
1Q22012.
4. Capital Value
Average capital values in 1Q12 reached RMB 15,800 per sqm,
but restrictions on real estate by the government slowed
the price growth to 5.3%. Outlook for capital value is stable
especially so for established business park location.
5. Yield
Gross yield is expected to compress further due to higher
development costs of developer contributed by rising land
costs, labour and construction cost and such trend is expected
to continue unless new stimulus policies by the Government to
improve market demand and thus positive rental growth.
Defnitions
Business Park Building: A business park building normally
caters for offce or R&D use and accommodates companies
from hi-tech, chemical, bio-medical industries, etc. The key
differentiating factor between a Business Park property from
a general offce building is that Business Parks are usually built
on land zoned for Industrial or R&D use. A secondary factor
is that the positioning for such properties and the property
specifcations and targeted clients of business park buildings
are strongly infuenced by the incentive policies, industry
positioning of its area and surrounding industry clusters.
Supply (Annual or Quarterly): the completed leasable foor
area of properties in the market during a year or a quarter;
Demand (Annual or Quarterly): the absorbed (leased) foor
area during a year or a quarter;
Rental: effective rental - face rental net of rent free period or
ft-out period.
Occupancy Rate: The measure of the percentage of foor
space occupied as compared to the total lettable area stock at
the time of measure.
Capital Value: average sale price of properties that are for
sale by en-bloc, or strata-title.
Yield: gross yieldwhichmeans annual gross rental income over
gross capital value of the properties. In some special market,
yield stands for a return rate based on a reasonable difference
compared against the yield of Grade B or decentralized offce
buildings.
Net Effective Rent (RMB/sqm/day)
2.0
2.4
2.6
2.8
3.0
3.2
1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12
3.08
Source: Jones Lang LaSalle Research
Capital Value (RMB) & Increase rate
CV (RMB ‘000)
Increase rate
5
10
20
25
0
10%
-20%
20%
-10%
30%
40%
0%
2009 2008 2010 2011 1Q12 2012F 2013F 2014F
Source: Jones Lang LaSalle Research
Capital Value (RMB ‘000)
Rate of Incr
ease
95
A DECADE OF ENABLING BUSINESSES