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. If so, and there are a lot of doubters about this recovery, then the charge has undoubtedly been led by China. Without debate or discussion.
Not only is the Chinese residential property market soaring, but now the latest figures show that the country’s commercial real estate sector is also performing above expectations.
A report from Real Capital Analytics showed that China’s transactions totalled US$31.2 billion following a surge in sales of land development rights after the Government eased credit terms.
US sales were US$16.2 billion in the first half according to the report, and the UK’s were US$13.7 billion. Add them both together and China is still in the lead.
PropertyWire quotes Dan Fasulo, Real Capital’s managing director who said, "There’s no question that China will be a more significant player on the world stage for commercial property transactions versus other Western countries." But he, too, questioned whether such strong growth was sustainable.
Many analysts said that sales growth is the first step toward a global recovery. The first half’s total sales in China 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.
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.