NEWSLETTER. Table of Contents. Call us at March - April. Helping you to find and design the office you want

March - April NEWSLETTER Helping you to find and design the office you want. Call us at 021-6230 1919 www.sofiagroup.com Are Serviced Apartments S...
3 downloads 2 Views 1MB Size
March - April

NEWSLETTER Helping you to find and design the office you want.

Call us at 021-6230 1919

www.sofiagroup.com

Are Serviced Apartments Shanghai's Best Investment? The high demand for property that is characteristic of a booming metropolis has been attracting real estate investment to Shanghai for years now. Yet while sound opportunities may be found across the spectrum of the city's industrial, commercial and residential real estate, which niche segment offers the truly best prospects for investors today? While the answer may vary according to the investor’s specific goals and resources, there is one market segment that stands out as a top contender to anyone who does their research: the serviced apartments sector. Perennial Strong Performer

Table of Contents Market Insight – Serviced Apartments for Investment The Scene Property Snapshots – Raffles City Changning, Gopher Center, Century Grand Events – Performance Art and Design Shanghai Dining – Alan Wong’s Brain Food – PechaKucha Market Notes

Offering hotel–style services such as cleaning and laundry and typically access to good clubhouse facilities as well, Shanghai's serviced apartments far outperform the city's hotels in terms of average occupancy rates, and they do better than regular rental apartments by that measure as well. As the chart at below shows, average occupancy rates for serviced apartments in Shanghai have equaled or bettered those of regular rental apartments for all but one of the past 8 years. The current average occupancy of 90+% compares to a citywide average occupancy rate of about 70% for star-rated hotels. Rents – Serviced vs Regular Aparments

Occupancy – Serviced vs Regular Aparments With their value-added extras, serviced apartments are also able to command far higher rents than regular rental units. Data used to create the below chart shows that rents for serviced apartments have averaged 20% to 24% higher than rents for regular apartments for each of the last 8 years. Below is a list of some high-end serviced apartment projects in the city along with their associated rental range.

Property Fraser Residences Lanson Place

Location Xintiandi

Shanghai Center The One Executive Suites

Nanjing West Rd

8 Park Avenue Royal Pavilion Grand Gateway Shama Xuhui Fraser Suites Marriott Apartments Green Court Green Villa

Former French Concession Xujiahui Lujiazui Eastern Pudong – Jinqiao and Century Park

Rent, RMB / month 2 bedrooms

3 bedrooms

4 bedrooms

30,000

38,000 – 52,000

--

--

46,000-57,000

--

38,000-54,000

46,000-58,000

67,000

22,000-28,000

25,000-30,000

80,000

13,000-17,000

17,000-25,000

35,000-55,000

--

30,000-35,000

35,000-45,000

18,000-22,000

24,000-28,000

--

23,000-26,000

30,000-35,000

--

45,000-64,000

50,000-80,000

30,000-50,000

55,000-60,000

--

--

17,000-35,000

28,000-35,000



--

55,000-80,000

Robust Demand Base The strong performance of the serviced segment seems largely a result of the city's growing headquarters economy; high-level foreign executives and their families have long been a primary driver of demand in this market, especially at the high-end of the field. According to local residential realtors we consulted, demand for serviced residences has also been growing strongly among domestic enterprises in recent years – hardly unsurprising given Shanghai's central role in the Chinese economy and the increasingly deep pockets of many large Chinese firms. Other occupier groups creating demand in this market include Chinese entrepreneurs returning from overseas, and well-to-do locals who favor serviced apartments as a fashionable and convenient lifestyle choice. Our sources note that two trends seem to be further boosting demand from multinational corporations in recent years. One is a growing tendency among these enterprises to post young expatriates to the city instead of the seasoned veteran executives they have typically sent. The corporations, apparently, are even more likely to house these young expats in serviced homes. The second trend is a significant increase in short, project-based stays of, for example, three to six months.

Brands, Buyers Jostle for Stakes Investors and big international property brands have naturally been fighting to seize shares of this burgeoning market, and since the first serviced apartments in the city opened in Shanghai Centre in 1990, billions have been spent on building and acquiring new developments. Recent bulk transactions include the sale of Changning District’s 虹 桥 绿 苑 to Nanjing-based Landsea Group for RMB 540 million last July, and the sale of Lanson Place at Xintiandi to the Zhongrong Group for 920 million RMB in September. (Note that the governmentgranted land use period for serviced apartment developments is 40 years, which is less than the 70 years allowed for regular residential properties, and transaction prices reflect the number of years of land use remaining.) International serviced apartment brands in Shanghai include The Ascott, Citadines and Somerset brands owned by Singaporean real estate giant CapitaLand. Singapore-based Frasers has properties under its flagship and Modena brands in the city, and will be opening a Capri-branded property this year. US-based service residence giant Oakwood to date has only one Shanghai property, which is located in Putuo district. Five-star hospitality companies operating serviced apartments in the city include Shangri-la, Four Seasons, Kempinski and Marriott. The only real threat to the continued strong performance of the serviced apartment niche seems to be the possibility of future oversupply. Many new projects now under construction or planning include: • the above-mentioned Capri by Fraser • two more Ascott serviced apartment developments with a combined 296 units, both scheduled for completion in 2019 • a 112-unit project by Thai luxury hotel company Dusit and its Chinese partner, scheduled to open this summer in Xuhui district • a 168-unit Shama serviced apartment building, the fifth in Shanghai; Shama is a brand of Thailand's Onyx Hospitality

The Scene

(c) 2016

Property Snapshots

Raffles City Changning

Gopher Center

Century Grand Metropolis

The second of CapitaLand's Raffles City developments in Shanghai comprises a shopping mall, three Grade A office towers and heritage buildings including historic St. Mary's church, and it will be a major addition to the bustling Zhongshan Park area when fully finished in 2017. Building III has been completed and its occupancy rate now stands at 80%. Building II is being handed over in second quarter of this year, and only spaces in its high zone are available. Building I is expected to be handed over in first quarter of 2017.

This new building by Chinese developer Sunac was sold for RMB 3.126 billion in 2014 to Gopher Asset Management, a subsidiary of Noah Holdings, the first private wealth management firm to list on the New York Stock Exchange. It has received a gold rating for core and shell from the us green building council, and has the attractive advantage of being directly over the new Expo Museum subway station of line 13, which just recently went into operation. Xintiandi as the next stop north on the line.

This new mixed-use development in the Zhuyuan area of Pudong was completed at the end of last year and includes an underground department store, movie theater and 5 low-rise office buildings. With an attractive location at the intersection of four subway lines, its developers are retailing giant Bailian Group and Lujiazui Group.

Building quality: Grade A

Building quality: Grade A

Building quality: Grade A

Address: 1139 Changning Road

Address: 757 Mengzi Road

Address: Zhangyang Road/Dongfang Road

Ceiling height: 2.7 meters

Ceiling height: 2.8 meters

Ceiling height: 3.0 meters

Recommended Floor/Area: 1,749 sqm

Recommended Floor/Area: 2,070 sqm

Recommended Floor/Area: 2,402 sqm, 2,294 sqm

Rental/sq.m/day: RMB 7.0 - 8.0

Rental/sq.m/day: RMB 7.0 - 8.0

Rental/sq.m/day: RMB 10 - 11

Total Floors: 29 floors in Building II, 22 floors in Building III

Total Floors: 32F

Total Floors: 5 buildings of 10, 14,15, 16 floors

Metro: 1 min walk to lines 2,3 & 4 at Zhongshan Park Station

Metro: Direct access to line 13, Expo Museum Station; 10-min walk to line 4, Luban Road Station

Location: Changning

Location: Huangpu

Location: Pudong

Availability: Limited spaces now available in Buildings III and II

Availability: Leasing now, open June 2016

Availability: New project, space now leasing

Century Grand Metropolis Raffles City Changning

Gopher Center

Contact NAI Sofia Group Shanghai at 021-6230 1919 for further information on the three office building properties listed above, or for information on any other commercial property in the city.

Metro: Direct access to Century Ave Station, lines 2, 4, 6, 9

Events – Performance Art and Design Shanghai ‘Babel Me’ is an exhibition in the Glass Museum Shanghai Baoshan that features works by international and domestic artists all centered on the theme of urban renewal. The exhibit explores " how the changes inherent in city regeneration, the destruction and rebuilding of both property and communities, affects an individual’s and therefore a community’s thinking and relationship forming process." Certainly an apt topic for a Shanghai audience. Ends March 18th. 宝山区长江西路 685 号 ( 近钢四路 ) 685 Changjiang W Road, Baoshan. See www.WhyWhyArt.com for more details. "Investigate It", an exhibition curated by Shanghai-based architect and scholar Feng Lu, explores architectural theory and design in China in works by eleven contemporary Chinese architects, artists, and scholars. March 12th - May 15th at OCAT Shanghai Project Space, 1016 North Suzhou Road. Hours: 10am - 7pm, closed Mondays.

Design Shanghai is an exhibition and forum that showcases design brands from all over the world, drawing top architects, interior designers, property developers, retailers and private buyers. The fourday show attracted 42,000 visitors last year. Takes place March 9th12th inside Shanghai Exhibition Center. Tickets can be purchased for US$ 16 on www.designshowshanghai.com. Joshua Bell, violinist and Music Director of the Academy of St Martin in the Fields, is widely recognized as one of the musical geniuses of our era and he will be performing pieces by Beethoven, Ravel and Vitali at Shanghai Oriental Arts Center on April 16th. Book tickets by calling 4006-466-406. Ballet du Grand Theatre de Geneve will perform a dance version of Shakespeare's A Midsummer Night's Dream at Shanghai Grand Theatre on April 22nd and 23rd. Tickets are RMB 180 to 880 and may be booked on www.damai.cn.

Dining Suggestions – What is it about Hawaii that makes people smile even when coming encountering just a small part of it? Whatever it is, it had us smiling the second we walked into Alan Wong's restaurant and noticed the tropical flowers, lilting strains of ukulele music and warm welcome of the restaurant hostess. And we're glad to say the smile, or at least its pleasant feeling, stayed with us for the duration of the meal. There is no wall separating the elegant interior of Alan Wong's and its sparkling clean kitchen where chefs are industriously preparing and cooking your food. As the place is relatively small, you feel you could shout at the guys – "Extra butter on the roast pig for over here please" – and they'd gladly do as you say. Our Hawaiian Plate Lunch included a tender piece of Kalua pig, ahi poke (tossed raw tuna salad), lomi tomato (a salad-type dish reminiscent of Mexican salsa), Misoyaki Cod (black cod marinated in Japanese miso paste) and Musubi (a slice of meat on rice wrapped in seaweed). The freshness of the fish made us feel they could only have come from a pristine place like Hawaii. Seasonings were subtle, delicious and blended nicely with one another. Including an amuse-bouche, a heavenly lobster chowder, bottled Hawaiian water, fresh coffee and a "Pick Me Up" rum pastry for dessert (complete with eyedropper for injecting the rum), our meal came to CNY 398, 15% service charge included. Not a price we prefer to pay for lunch everyday, but in this case well worth it.

Alan Wong's 2nd floor of Shanghai Center 1376 Nanjing Road West Phone: 6289-0618 www.alanwongs.com

Brain Food – PechaKucha PechaKucha is accepting applications for speakers at its next event, the date and venue of which is still being decided. If you would like to share a great idea in a 5-minute speech to an intellectual and fun crowd then get in touch with the organizers by emailing vicky. [email protected], or if you have WeChat on your phone you can search for the organizer's channel: PechaKuchaShanghai.

Market Notes

Office Building Rental Rates by CBD Area: CNY / sqm / day

Office Building Rental Rates by CBD Area: CNY / sqm / day 16

Changning Raffles City is expected to be handed over this March and Letters of Intention have been signed for basically all ground-level spaces.

14 12 10 8 6 4 2 0

Hongqiao ZhongShan Xujiahui Xujiahui Hongqiao ZhongShan Park Park

Shanghai Shanghai Railway Railway Station Station

Grade A A Grade Office in Office in Putuo Putuo District District

Huaihai JingAn Huaihai JingAn Road Temple Temple Road and and West West Nanjing Nanjing Road Road

People People Square Square

North Bund Lujiazui Lujiazui North Bund

Century Century Avenue Avenue

Shanghai Office Occupancy in Percentage

Shanghai Office Occupancy in Percentage About 20,000 sqm of the Dazhongli project in the Nanjing West Road area have now been leased out, and with less available space rents in the whole area have crept up slightly from 12.5 RMB / sqm / day to RMB 13 / sqm / day.

100 80 60 40 20 0

ZhongShan Xujiahui Xujiahui Hongqiao ZhongShan Park Park

Shanghai Shanghai Railway Railway Station Station

Grade A Grade Office in in Office Putuo Putuo District District

JingAn Huaihai JingAn Road Temple Temple Road and and West West Nanjing Nanjing Road Road

People Square Square

North Bund Lujiazui North Bund

Century Avenue Avenue

NAI Sofia Group Shanghai

Your Shanghai office, industrial and retail property specialists Our consultants will be delighted to personally assist you at any time. You may call our main Shanghai office number, (86 21) 6230 1919, or contact directly a consultant who handles your specific concern:

Ms. Jean Gao

Ms. Gu Meng

languages: English, Mandarin +86 21 6230 1919 x 801 [email protected]

languages: English, Mandarin +86 21 6230 1919 x 815 [email protected]

Mr. Tom Liu

languages: English, Mandarin +86 21 6230 1919 [email protected]

Ms. Mary Hoo

languages: English, Mandarin +86 21 6230 1919 x 803 [email protected]

Ms. Emma Zhang

languages: English, Mandarin +86 21 6230 1919 [email protected]

Ms. Amanda Zhu

languages: English, Mandarin +86 21 6230 1919 x 806 [email protected]

Mr. Alex Ding

RETAIL RENTING

Ms. June Zhang

Language: English, Mandarin +86 21 6230 1919 x 802 [email protected]

languages: English, Mandarin +86 21 6230 1919 [email protected]

LAND AND PROPERTY APPRAISAL

DESIGN AND BUILD OUT MANAGEMENT

Mr. Bjarne Bauer

Language: German, English, Mandarin 86 21 6230 1919 x 808 [email protected]

INDUSTRIAL RENTING

OFFICE RENTING

INDUSTRIAL AND OTHER PROPERTY DIVESTITURES

Main Contact for

Ms. Selina Lv

languages: English, Mandarin +86 21 6230 1919 x 800 [email protected]

Ms. Candi Wang

languages: English, Mandarin +86 21 6230 1919 x 809 [email protected]

Mr. Paul Xia

Language: English, Mandarin +86 21 6230 1919 [email protected]

Mr. Jet Guo

languages: English, Mandarin +86 21 6230 1919 x 805 [email protected]

Ms. Cecilia Liu

languages: English, Mandarin +86 21 6230 1919 [email protected]

Suggest Documents