HONG KONG,CHINA - Media OutReach - 30 January 2019 - According to Cushman & Wakefield Research's latest Greater ChinaCapital Markets Express report, China's commercial real estate (CRE) investmenthit a new record-high of RMB296 billion (approx. US$43.8 billion) in 2018, climbing a formidable 9.5% over 2017, amid the country's clampdownon lending, impact of the prevailing trade frictions with the U.S. and acooling domestic economy.

Cushman & Wakefield noted active foreign capital demonstrating aclear preference for China's Tier-1 cities in 2018 where investment accounted fornearly 99% of total foreign investment in China, at RMB94.6 billion (approx. US$13.9billion), more than double the amount in 2017.

China's tough real estate lending environment created some excellentacquisition opportunities as vendors' expectations and supply pipelinessoftened. Strongend-user leasing demand also boosted the investment case. 

Catherine Chen, Headof Forecasting & Capital Markets Research, Greater China at Cushman &Wakefield, said: "Prevailing trade frictions and ongoing economic cooling didlittle to quench foreign investors' appetite for property in mainland China. In2018, RMB96 billion worth of investment was led by foreign investors, a 32%share of major transactions. The U.S.-originated component of this totaledRMB14 billion (approx. US$2.1 billion)." 

Chen added, "Foreigncapital represented 45% of total investment (foreign and domestic) inthe Tier-1 cities, significantly up from the 25% share in2017. Shanghai was the primary target of foreign capital, recording RMB71.5billion (approx.US$10.5 billion) in CRE investment in 2018, surging 78% y-o-y.Shanghai's relatively high component of offshore structured assets provedattractive to international investors."

Cushman &Wakefield witnessed cash-strapped developers shift gears and restructureproject pipelines to focus on residential developments. Many local players backed away fromcommercial development or even looked to dispose of commercial projectcompanies to shore up balance sheets.

James Shepherd, Managing Director of Research, GreaterChina at Cushman & Wakefield, said: "Despite recent adjustments to thereserve ratio requirement, it seems unlikely that restrictions specifically onreal estate debt are likely to be loosened in any significant way for at leastthe first six months of the year. Nevertheless, we forecast continuedopening-up of the commercial property market to foreign investors and banks."

Shepherd added: "Cushman & Wakefield forecasts that Shenzhen, Guangzhou and Hong Kongare set to see increased demand through 2019. Beyond core cities of the GreaterBay Area, we also note strengthening interest in cities such as Zhuhai,Zhongshan, Foshan and Dongguan as well as key provincial capital cities.

The report also offers insight from industryexperts from various service lines at Cushman & Wakefield, including Gordon Marsden, Regional Director, AsiaPacific Capital Markets, and SeanZhang, Head of Financial Advisory Services, China.

Click hereto view the full report.

About Cushman & Wakefield

Cushman &Wakefield (NYSE: CWK) is a leading global real estate services firm thatdelivers exceptional value for real estate occupiers and owners. Cushman &Wakefield is among the largest real estate services firms with 48,000 employeesin approximately 400 offices and 70 countries. Across Greater China, there are20 offices servicing the local market. The company won four of the top awardsin the Euromoney Survey 2017 & 2018 in the categories of Overall, AgencyLetting/Sales, Valuation and Research in China. In 2017, the firm had revenueof $6.9 billion across core services of property, facilities and projectmanagement, leasing, capital markets, advisory and other services. To learn more,visit www.cushmanwakefield.com.hk or follow us onLinkedIn (https://www.linkedin.com/company/cushman-&-wakefield-greater-china)