Residential property prices rose across the board New economy assets such as industrial, logistics and data centres on the rise Transactions In 1H 2022 Amounted to RMB24 Billion, 5-Year Record High by Investment Share in Greater China

• In 1H 2022, the overall sales figure for the primary and secondary residential market demonstrated a year-on-year downturn. Nevertheless, the majority of the transactions were premium and luxury properties, pushing the overall house price benchmark upwards. The total sales figure for the year is expected to rise by 5% to 10%.
• The CRE investment market in the Greater Bay Area (GBA) recorded a total transaction value of RMB24 billion, accounting for about 32% of the total large size deals (>100M RMB) in China, hitting a five-year record high by investment share.
• Investment in new economy assets such as industrial, logistics, and data centres has increased significantly and started to dominate the market. In particular, transactions of industrial logistics in Shenzhen made up 73% of the GBA market, a six-fold rise on the same period last year.
• Investment transaction activity in 1H 2022 was dominated by domestic investors at RMB22.2 billion, demonstrating optimism in investment appetite.

HONG KONG SAR - Media OutReach - 28 July 2022 -Global real estate services firm Cushman & Wakefield today published its Greater Bay Area Property Investment Market Review and Outlook 1H 2022. In 1H 2022, the residential market in the Greater Bay Area (GBA) demonstrated a price increase, but coupled with a fall in the number of transactions. The overall sales figure has dropped by around 45% y-o-y, yet the price has shown a general upward trend. With the development of GBA cities becoming more mature and as the transportation network completes, demand in logistics from Guangzhou, Shenzhen and Dongguan have expanded to other GBA cities, resulting in increased investment activities in new economy assets such as industrial, logistics, industrial parks, and data centers. However, due to the continued impact of the pandemic on corporate development and retail consumption, investors have become more cautious about conventional offices and shopping centres, while self-use-driven purposes covered 90% of the total investment share. Residential Price and Sales Volume in the GBA Amongst all GBA cities, residential property prices in Guangzhou and Shenzhen have shown outstanding performance, while the other seven cities remained stable. The two major cities of Shenzhen and Guangzhou have recorded RMB75,045 and RMB38,821 per sq m, representing a y-o-y increase of 17.1% and 13.6%, respectively. Other cities such as Foshan and Dongguan have recorded an approximately 80% increment since 2017, with Guangzhou showing a 136% rise (Chart 1). The impact of the pandemic, and the recent government control measures in Shenzhen and Guangzhou, resulted in pre-sale and supply of premium and luxury properties instead of mid-range priced stocks. As a result, the noticeable rise in property prices masked the declining trend of transaction volume in all cities. From the sales data, the overall sales figures and residential property prices in the GBA have moved in opposite directions in 1H 2022. The number of first- and second-hand transactions have totalled around 190,000, a fall of 45% y-o-y. Although being the highest among the GBA cities, the sales figures of Guangzhou and Foshan were still behind the performance at the same time last year. The drop was most obvious for Huizhou, Zhuhai, and Dongguan, at 60% y-o-y. Alva To, Cushman & Wakefield's Vice President, Greater China & Head of Consulting, Greater China mentions, "The increment of first-and-second-hand residential property prices in the GBA in 1H 2022 was driven by transactions of premium and luxury properties, while we expect the price to remain stable throughout the year. Despite a plunge in overall transaction volume in 1H 2022, we expect the transaction volume to increase by 5% to 10% as the government's control measures ease." GBA CRE Investment Transaction Number and Value Since the launch of the Framework Agreement on Deepening Guangdong-Hong Kong-Macao Cooperation in the Development of the Greater Bay Area in 2017, CRE transactions have become more active, gradually increasing CRE's share of investment in Greater China. Despite the impact of the pandemic, the total national transaction value was recorded at RMB74.7 billion in 1H 2022. Large size transactions in the GBA attributed to 32% of the Greater China share, hitting a five-year high since 2018 (Chart 3), showing the increased investment traction. The total annual transaction value is expected to reach RMB65.5 billion for the full year 2022. Transaction Value and Distribution of Investors In terms of transaction value, most transactions in the GBA were smaller value deals. Of the 26 deals recorded in 1H 2022, 19 of them were below RMB1 billion,...