The COVID 19 pandemic has cast a shadow over the beginning of the new decade. CBRE expects the global economy to contract by 5.2% in 2020,before returning to growth next year. China’s GDP slowed significantly in Q1 2020 but quickly returned to growth in Q2 2020, expanding by 3.2% y o y, supported by a rebound in the advanced manufacturing, financial industry and TMT sectors.
China’s commercial real estate market also recovered well in Q2 2020, with office net absorption turning positive and traffic in shopping malls returning to around 80% of pre pandemic levels by May. Demand for logistics facilities has seen robust growth, driven by surging requirements from e commerce and 3PLs. Despite China’s rapid recovery, the road ahead remains challenging. The pandemic has intensified a range of issues such as deglobalisation, geopolitical conflict and supply chain reorganisation, all of which will have a lasting impression on China's future economic development. Domestic hurdles include a shrinking labour force, unbalanced regional development, climate change and other environmental concerns.
In response to these challenges, China will further accelerate reforms and opening up over the next decade, promote sustainable development and economic transformation, and put urbanisation and internal circulation at the core of economic growth.
This will usher in a new era of commercial real estate development characterised by sustainability, technological innovation and flexible workplaces. The emergence of new tier I cities and alternative asset classes will create significant new opportunities for investment.