The development of over 100 million square meters of commercial space over the next decade is bringing much needed high-quality stock to these 50 cities. The movement of developers deeper into China50 helps to support the expansion of domestic and international corporates, retailers and hotel operators across the China50, into Tier 3 cities as they tap into favorable demographics and seek ‘first mover’ advantage.
“As the volume of tradable property assets increases and transparency improves, institutional investor interest in commercial real estate in the China50 will increase,” added Fung. “Their focus will be on the retail sector, which provides the largest real estate opportunity, driven by strong growth in China50’s middle class population, which is expected to double to over 125 million by the middle of the decade.”
And while the China50 offers a compelling long-term growth story, Fung confirmed, the road to maturity is unlikely to be smooth and fears of excessive risk may lead to some caution in the property market over the short to medium term.
“They will not be immune from volatilities in the global economy but importantly, some China50 cities—such as Chongqing, Wuhan and Xi’an—may prove to be more resilient than most, underpinned by the structural growth of China’s domestic economy,” he concluded.
For the full report, visit www.joneslanglasalle.com/China50Cities.