中国房地产2024年第三季度租金出现疲软；租金...

3Q24rental:aquarter of softness;rentsdown across sectors Industry Overview 08 November 2024 3Qretail salesanotherlegdown;Oct sentimentimproved Despite an appreciation in JPY that should have reduced the impact of sales leakage, the3Q YoY tenant sales growth was weaker vs 1H24 for some of the high-end shoppingmalls. HLP's tenant sales fell 15% in 9M24, vs -13% in 1H24. 9M24 tenant sales growthwas -21%/-8%/flat in 9M24 for luxury malls in Shanghai/luxury malls outsideShanghai/sub-luxury malls, weaker compared with -20%/-6%/+1% in 1H24. Theupcoming supply in Shanghai (Swire's expanded Qiantan Taikoo Li, HKL's West Bundproject and SHKP's ITC) could take market share away from existing projects. Swire'stenant sales performance was mixed in Q3, with sales drop in Chengdu narrowed butsales decline at Shanghai and Guangzhou Taikoo Hui widened. CRL saw negative SSSG inJul but a stable YoY SSSG in Aug and Sep (likely a mild drop YoY in 3Q). Overall, spendingby middle-income customers were weaker YTD but that from the high-net-worthshoppers were resilient. Retail sales during the Oct holidays were better than that duringMid-autumn Festival and the May National Day holiday as sentiment improved (thegovernment's stimulus policy and a better stock market since late-Sep). Yet, it is tooearly to extrapolate the trend going forward, in our view. We maintain Buy on CR Landgiven attractive valuation. EquityChinaReal Estate/Property Karl Choi, CFA >>Research AnalystMerrill Lynch (Hong Kong)+85235083108karl.choi@bofa.com Fan Tso, CFA >>Research AnalystMerill Lynch (Hong Kong)+852 3508 2875fan.tso@bofa.com Eric Du>ResearchAnalyst+852 3508 3329eric.du@bofa.com SSSG: Same-store sales growth Retail:3Qrentsdown;caprates expanded intier-1 cities HLP = Hang Lung Property According to property agency CBRE, amid a difficult retail environment, retail spot rentsin the four tier-1 cities were all down (Exhibit 1) in 3Q after a stable 2Q. Rent inShanghai was steady (-0.2% QoQ) but that in Guangzhou dropped the most (-1.1% QoQ)In 9M24, Guangzhou suffered the largest rental drop of 2.5%, while vacancy was also thehighest at 8.3%, as of end-3Q24. Cap rates expanded 10-45bp QoQ across all tier-1cities. Capital value dropped 9-17% in 9M24. Per our ground checks, the sales drop,especially for luxury items, resulted in lower turnover rent but base rent reversions (vsexpiring rents three years ago) in key shopping malls remained neutral to positive. CRL = China Resources Land HKL = Hongkong Land Office: expectedly weak; rent drop in Shanghai acceleratedOffice remained weak in tier-1 cities, with spot rents down by 1.2%-3.6% QoQ (down3.5%-7.2% in 9M24). Rental drop in Shanghai accelerated in 3Q. Vacancy expanded inShenzhen and Shanghai but fell in Guangzhou and Beijing, although the absolute vacancy Logistics:Shenzhen stands out; Guangzhou resilient Spot rent for logistic properties in Shenzhen grew another 0.8% QoQ in 3Q (up 2.3% in9M24), while that in Guangzhou was down slightly by 0.6% QoQ (-.5% in 9M24).Logistics spot rents in Beijing/ Shanghai dropped 3.5%/2.9% QoQ in 3Q, and were downby 7.2%/4.9% in 9M24. Vacancy rates in Beijing and Shanghai stood above 20%, as ofend-3Q24, while Shenzhen was almost fully occupied. Vacancy in Guangzhou edged up3.4ppt QoQ but remained at a reasonable level of 7.3%. Cap rates were stable in Timestamp: 07 November 2024 07:20PM EST 3Q24 rental performance Exhibit 1: 3Q24 office, retail and logistics rental data for select cities Office and logistic rents weakened more QoQ; Shanghai office rents declined mostly in 3Q24 Exhibit 2: Major cities retail and office occupancy rates Retail/office/logistics vacancy rates still high in 3Q24 China office rent, stock, and vacancy inkey markets Source: CBRE, BofA Global Research Source: CBRE, BofA Global Research BOfA GLOBAL RESEARCH Guangzhou office vacancy fell slightly QoQ Guangzhou office rental weakened in 3Q Source: CBRE, BofA Global Research Source: CBRE, BofA Global Research Source: CBRE, BofA Global Research Office supply and take-up in major cities Beijing office saw muted supply in 3Q24 Source: CBRE, BofA Global Research Source: CBRE, BofA Global Research Retail vacancy, stock, and rent in majorcities Exhibit 16: Beijing shopping mall - Rental Beijing retail rental index decreased in 3Q Source: CBRE, BofA Global Research Source: CBRE, BofA Global Research hanghai retail rental index was flattish in 3Q Source:CBRE,BofA Global Research Source: CBRE,BofA Global Research Exhibit 20: Guangzhou shopping mall - Rental Guangzhou retail rental index declined in 3Q Guangzhou retail vacancy rate flattened in 3Q Source: CBRE,BofA Global Research Shenzhen retail rental index edged down slightly in 3Q Source: CBRE, BofA Global Research Source: CBRE, BofA Global Research BofA GLOBAL RESEARCH Retail supply and take-up in major cities Exhibit 23: Beijing retail supply and take-up Beijing saw more demand than supply in 2Q24 Sou