Market maturity: China commercial real estate market
| Date | 02 February 2015 |
| Published date | 02 February 2015 |
| DOI | https://doi.org/10.1108/JPIF-08-2013-0047 |
| Pages | 4-18 |
| Author | Qiulin Ke,Karen Sieracki |
| Subject Matter | Property management & built environment,Real estate & property,Property valuation & finance |
Market maturity: China
commercial real estate market
Qiulin Ke
The Bartlett School of Built Environment, University College London,
London, UK, and
Karen Sieracki
KASPAR Associates Ltd, Tunbridge Wells, UK
Abstract
Purpose –The purpose of this paper is to explore the evolutionary path to market maturity that
China property market has taken over the last few decades. The focus is on the commercial real estate
markets in Beijing and Shanghai. It will help international investors understand the market
environment, risk and market activity process.
Design/methodology/approach –In this research, the authors apply the market maturity
framework and its key determinants based on previous work undertaken by Keogh and D’Arcy (1994)
and Chin et al. (2006) for the analysis of Chinese commercial property market. Particular focus is on
Beijing and Shanghai. The questionnaire is designed to obtain fair and objective views from
international property consultancy firms active in Beijing and Shanghai markets. There are not
many of these international property consultancies. The reason why this type of business was selected
was to insure that the business had an understanding of China’s place in the global commercial real
estate market as this market matures from its emerging market status.
Findings –The findings reveal that the respondents felt the commercial property markets in
Shanghai and Beijing were now moderately mature. However, issues such as poorer level of standard
market information, development instability, low transparency of the legal system, high taxes and
high government invention still existed in China’s commercial property market, therefore hindering its
progress towards greater market maturity.
Research limitations/implications –The small same size of the survey is the major limitation of
the research.
Practical implications –International investors and analysts can benefit from the research findings
through a better understanding of the behaviour and trends in this unique market which will be
reflected in their decision-making process.
Originality/value –An explorative approach was used due to the lack of data to examine the
perception of China’s commercial property market’s evolution and maturity. The findings can then be
placed in the context of other Southeast Asian cities. The evolutionary process of China’s property
market is rarely examined in previous studies of China property market due to the lack of data and
transparency.
Keywords China, Evolution, Beijing, Commercial property market, Maturity, Shanghai
Paper type Research paper
1. Introduction
As the Chinese economy has transformed into dynamic private sector-led economy
and has become integrated into the global economy, its property market has
experienced dramatic changes. Starting from a closed, centrally planned economy in
the early 1980s, the Chinese commercial property market emerged first in the cities of
Beijing, Shanghai and Guangzhou, driven by the demand for international standard
office space by multinational companies coming to China to set up regional
headquarters or/and offices. This created a user market of demand for land and
buildings from overseas companies and local businesses from which the commercial
Journal of Property Investment &
Finance
Vol. 33 No. 1, 2015
pp. 4-18
©Emerald Group Publishing Limited
1463-578X
DOI 10.1108/JPIF-08-2013-0047
Received 5 August 2013
Revised 31 March 2014
13 July 2014
Accepted 14 July 2014
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1463-578X.htm
4
JPIF
33,1
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