Finance

China’s commercial property segment is seeing some bright spots

Published

1 year ago

April 11, 2024

Business Finance News

Illuminated skyscrapers stand at the central business district at sunset on November 13, 2023 in Beijing, China.

Vcg | Visual China Group | Getty Images

BEIJING — China’s commercial property sector is seeing pockets of demand amid an overall real estate slump.

The capital city of Beijing is seeing rents for prime retail locations rise at their fastest pace since 2019, property consultancy JLL said in a report Tuesday. Rents increased by 1.3% during the first three months of this year compared with the fourth quarter of 2023, the report said.

Demand from new food and beverage brands, niche foreign fashion offerings and electric car companies has helped drive the interest in shopping mall storefronts, according to JLL.

The firm expects the demand to persist throughout the year, helping boost rents, which remain well below pre-pandemic levels.

Commercial real estate, which includes office buildings and shopping malls, makes up just a fraction of China’s overall property market.

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Sales of offices and commercial-use properties rose 15% and 17%, respectively, by floor area, in January and February from a year earlier, according to Wind Information.

In contrast, floor space of residential properties sold dropped by nearly 25% during that time, the data showed. Sales for both commercial and residential properties had fallen for much of last year, according to Wind.

Covid-19 restrictions on movement had also cut demand for China’s commercial property, in line with global trends. China’s economy, however, took longer than expected to rebound from the pandemic, amid a broader slump in the property market.

Getting cheap enough to buy

China’s commercial real estate prices are nearing an attractive buying point, Joe Kwan, Singapore-based managing partner at Raffles Family Office, said in an interview last week.

“We do have an internal timeline or projection of how far valuation has to fall before it makes it attractive for us,” he said. “I think the opportunity is about to open up for us right now.”

Kwan said he expects to start making deals in the second half of this year, through next year. The firm is primarily looking at commercial properties in Shanghai and Beijing.

Such bargain-hunting is not necessarily a sign that the market is on its way to a full recovery.

“What we have been observing is that owners [have] been throwing us the same opportunities, some of the same portfolios, but at a much discounted price on a quarterly basis,” he said. “So from that it gives us the general sense that it’s still going to be some way down the road before we can see the bottoming.”

“We do have still a very positive outlook on the longer term a prospect of China, given its size of population, given its demographics, given its consumption numbers,” Kwan said. “I think that right now it is going through a territory whereby it may overcorrect and people might miss out on the opportunity to acquire some really, really well-located, good-quality assets that will prove to be a winner, maybe not in the next two to three years, but at least in the mid-term.”

Hong Kong-based Swire Properties said in its report last month that it intends to double its gross floor area in mainland China by 2032. The company currently operates high-end shopping complexes branded “Taikoo Li” in Beijing, Shanghai and other major cities in China.

“In the Chinese Mainland, foot traffic has improved significantly and retail sales have exceeded pre-pandemic levels for most of our malls since pandemic-related restrictions were lifted. Our office portfolio has proven to be resilient despite a weak office market,” Tim Blackburn, Swire’s chief executive, said in the report.

Looking ahead, the company expects 2024 will be a “year of stabilization” in retail demand.

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Published

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Business Finance News

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Finance

Retirement account balances dip in Q1 2025 as savings rates hit record high

Published

2 hours ago

June 4, 2025

Business Finance News

Jack Otter and the ‘Barron’s Roundtable’ panelists share their best tips for how to prepare for retirement amid a market concerned with tariffs.

Retirement account balances dipped in the first quarter due to stock market turbulence. Still, people kept socking away money for their retirement, according to new data from Fidelity Investments.

The financial services company analyzed more than 50 million retirement accounts, finding that the average balances of 401(k), IRA and 403(b) accounts all saw small declines during the first three months of 2025.

The average 401(k) account balance decreased 3% quarter over quarter to $127,100, according to Fidelity Investment’s Q1 2025 retirement analysis.

IRA accounts had average balances of $121,983 and 403(b) accounts held $115,424 on average in the first quarter, 4% and 2% lower than the prior quarter, respectively.

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Fidelity largely attributed those declines to “market swings.”

The market was turbulent during the first quarter amid uncertainty surrounding tariffs and other policy issues, including popular index funds.

Still, retirement savings rates “stayed consistently high,” according to Fidelity.

For 401(k) accounts, employee contribution rates hit 9.5% during the first quarter, with the employer contribution rate coming in at 4.8%, according to its analysis.

Combined, the 14.3% savings rate for 401(k) accounts marked a “record” and the “closest it’s ever been to Fidelity’s suggested savings rate of 15%,” the company said.

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Holders of 403(b) accounts, meanwhile, had a rate of 11.8% on average.

“Although the first quarter of 2025 posed challenges for retirement savers, it’s encouraging to see people take a continuous savings approach which focuses on their long-term retirement goals,” Sharon Brovelli, president of workplace investing at Fidelity, said in a statement. “This approach will help individuals weather any type of market turmoil and stay on track to reach their retirement goals.”

During the first quarter, which was plagued with market volatility, 17.4% of 401(k) holders upped the size of their contributions, while only 4.9% lowered theirs, the report found.

Meanwhile, contribution rates among 14.6% of 403(b) holders went up in the first quarter.

Only a small percentage of people with those types of retirement plans altered their asset allocation during the first quarter, with just 6% of 401(k) users doing so and 4.7% for 403(b), it found.

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Fidelity’s analysis also showed that people with IRAs upped the amount of money that they put in those retirement accounts in the first quarter by 4.5% compared to 2024’s first quarter.

A separate survey released Monday by Gallup found 59% of U.S. adults have funds put away in a retirement savings account.

Among those with retirement savings plans that have not yet left the workforce, half reported they “expect to have enough to live comfortably in retirement,” according to Gallup.