Chongqing Real Estate: Residential Stable, Office Down, Retail Up

Stephen Chung

Managing Director

Zeppelin Real Estate Analysis Limited

October 2006

(Based on Data from the China Real Estate Index System CREIS)

Chongqing is one of the major metropolitans in the western region of China and its SMSA inhabitants number some 32,000,000 according to www.wikipedia.org. GDP per capita approximates US$1,000 and it is within the development radar of the central government in its drive to modernize the western region. It is expected to receive substantial support in infrastructural improvements and is also expected to contribute much to the opening of the west. Hence, we have recently looked at some real estate data and statistics on the Chongqing real estate market and here are a few preliminary observations:

A)     Real estate indexes: these comprise the residential, office, and retail sectors. Very briefly, the overall real estate market has been growing or rising gradually with residential being relatively stable, office dropping off, and retail gaining momentum.

B)     Residential during the first half of 2006 = 1) real estate $ invested amounts to 13,800,000,000 Yuan, increasing by 25% over the same period last year; 2) some 9,970,000 m2 of construction are commenced; increasing 18% over the same period last year; 3) total construction in progress thus amounts to almost 50,000,000 m2; representing an increase of 22% over the same period last year; 4) completed construction stands at 4,314,000 m2, down around 9% from the same period last year; 5) 7,338,700 m2 are sold; and 6) sales total 15,668,000,000 Yuan [averaging 2,135 Yuan / m2].

C)    Office during the first half of 2006 = 1) real estate $ invested amounts to 540,000,000 Yuan, decreasing by 21% over the same period last year; 2) some 244,000 m2 of construction are commenced; increasing 37% over the same period last year; 3) total construction in progress thus amounts to almost 1,888,000 m2; 4) completed construction stands at 87,000 m2; 5) 108,400 m2 are sold; and 6) sales total 473,000,000 Yuan [averaging 4,363 Yuan / m2].

D)    Retail during the first half of 2006 = 1) real estate $ invested amounts to 2,590,000,000 Yuan, decreasing by 7% over the same period last year; 2) some 108,800 m2 of construction are commenced; increasing 2% over the same period last year; 3) total construction in progress thus amounts to almost 9,688,000 m2; reflecting an increase of 10% over the same period last year; 4) completed construction stands at 895,000 m2; 5) 549,700 m2 are sold; and 6) sales total 2,573,000,000 Yuan [averaging 4,681 Yuan / m2].

Naturally, the above figures are averages and individual projects and properties may harbor prices and rates quite different from such averages, which are meant to offer an overall feel for the market level and to be used as benchmarks.

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