Subsequent to the elaboration of residential property market development in the previous issue, this issue will continue to explore prospects of the commercial property market. As for the office market, the impacts of the epidemic on the real economy at this stage has not yet been fully reflected. Since the epidemic fails to come to an end shortly, office rents are likely to be under pressure in the short and medium term. However, via the continued promotion in various preferential policies related to epidemic prevention and control measures, so as to lower the negative impacts of such measures on business operations, the downward pressure on office rents will more or less be eased.
Additionally, since the sales area of office buildings in first-tier cities in the first half of the year still fell by more than 40% year-on-year, there may be risk of rising inventory in the office sector after the disappointed office sale performance. However, once the epidemic has faded in the long run, it is believed that the new demand for office buildings will be established, and the steady and orderly development of office buildings will be achieved, and under the background of the full recovery and upgrading of the Mainland economy.
As for the retail market, given the moderate relaxation of pandemic prevention measures, the Mainland economy and consumer market have improved quarter by quarter, reducing the downward pressure on medium- and long-term retail rental levels. However, it will take time for a full recovery. The overall retail rent is expected to continue to be in a downward channel for the remainder of this year. At present, the Mainland is committed to develop a domestic demand market, by pushing forward various consumption policies at various levels, so as to release consumption potential and help stimulate the demand for physical stores and increase the momentum of the retail market.
Meanwhile, many commercial districts are undergoing project upgrades. In addition to online shopping and consumption, consumers are providing a number of trendy offline experiential consumer services, raising prospects of key commercial properties in the first-tier cities.