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Market maturity: China commercial real estate market

Qiulin Ke (The Bartlett School of Built Environment, University College London, London, UK.)
Karen Sieracki (KASPAR Associates Ltd, Tunbridge Wells, UK.)

Journal of Property Investment & Finance

ISSN: 1463-578X

Article publication date: 2 February 2015

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

Citation

Ke, Q. and Sieracki, K. (2015), "Market maturity: China commercial real estate market", Journal of Property Investment & Finance, Vol. 33 No. 1, pp. 4-18. https://doi.org/10.1108/JPIF-08-2013-0047

Publisher

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Emerald Group Publishing Limited

Copyright © 2015, Emerald Group Publishing Limited