Chongqing- "The first half of the year saw a strong recovery in Chongqing's commercial market. Many international brands debuted in Chongqing thanks to quality commercial carriers, highlighting the city's consumer capacity and brand attraction," said Zhu Jianhui, Head of Retail Property and Consumer Research at Jones Lang Lasalle (JLL) China, at a press conference on July 13.
JLL releases the Chongqing Commercial & Logistics Property Market Report for the first half of 2023 on July 13. (Photo provided to iChongqing)
Continued growth of consumer-oriented office tenants
According to a report released by JLL China, in the first half of 2023, Chongqing saw 140,000 square meters of new supply, with significant contributions from the Bank of China headquarters building and Financial City No. 3 T2 in Jiangbeizui CBD, pushing the total stock of Grade A office buildings over 3.7 million square meters. Besides, the vacancy rate dropped to 27.5% by the end of June, below the national average.
Large state-owned enterprises and government departments in Chongqing were active in office demand during the first half of the year, dominating transactions involving office spaces larger than 1,000 square meters. Meanwhile, private enterprises are still in recovery, and the demand for office buildings is low.
Chongqing has seen a steady return of tourists and cross-regional consumers. Data from the Chongqing Municipal Commission of Culture and Tourism Development showed that the number of tourists in 120 key scenic spots during the May Day holiday increased by 67.2% year-on-year.
Trade and consumption continued to surge. Remarkably, the Yuzhong Peninsula is an international consumer center core area, with the rapid growth of "consumer-oriented" businesses in the hotel, catering, retail trade, and study-abroad tourism, filling vacant commercial and residential apartments and street shops.
According to the report, due to the lag in recovering the macro economy's impact on corporate performance and the job market, most office tenants prefer spaces with flexible leases, complete surrounding facilities, environmentally friendly design, and full decoration.
Liu Yang, general manager and head of commercial real estate at JLL Chongqing, said that multiple industries seek to improve workplace efficiency while controlling property costs. Understanding customer changes and digging deeper into corporate space requirements will be vital to securing market growth.
Liu Yang, general manager and head of commercial real estate at JLL Chongqing, delivered a speech at the press conference on July 13. (Photo provided to iChongqing)
Quality commercial carriers attracting international brands' first stores
In the first half of the year, stimulated by the Spring Festival and May Day holidays, Chongqing's total retail sales from January to May reached 600.14 billion yuan, a year-on-year increase of 5.3%, with catering revenue increasing by 13.2% year-on-year, with the demand for leasing in the catering and service industries became active.
Many first catering stores, including Shake Shack, have settled in core shopping centers. Coffee and tea beverage brands, such as More Yogurt and M Stand, have also recorded several new leases.
The newly opened Mixc North Area in the Jiulongpo District has many highlights, integrating bomb shelters and century-old trees into the project planning, combining shopping with cultural history and natural landscape.
Mixc North Area also introduces numerous brands opening their first store in Chongqing, including JIL SANDER and Maison Margiela. ARC'TERYX, Descente, opened its flagship stores. International big names like Fendi, Loro Piana, and Loewe are also stationed in the Mixc luxury area.
With the support of quality commercial carriers, Chongqing's market is increasingly attractive to international and domestic advanced brands. The recovery of the catering industry has also increased demand for e-commerce food warehousing and supermarket warehousing, with an additional area of 41,000 square meters.
Investment opportunities for high-standard factory developers
In the first quarter of 2023, Chongqing's new energy vehicle production increased by 2.7 times year-on-year, with well-known enterprises, such as Geely and Dayang Electromechanical, settled in Chongqing. NEV giants' favor contributes to a stable leasing demand.
Manufacturers of intelligent connected new energy vehicles have higher requirements for factory building structure, floor load, power distribution, height, crane tonnage, fire rating, and facility management.
In the future, more professional high-standard factory developers and institutional investors will enter the Chongqing market to support the production needs of Chongqing's advanced manufacturing industry.