The vacancy rate remains high, and Shenzhen issued a "commercial rent change" for comments.

On the afternoon of October 9th, 65438/KLOC-0, Shenzhen Housing and Urban-Rural Development Bureau issued the Notice of Shenzhen Housing and Urban-Rural Development Bureau on Matters Related to the Transformation of Existing Commercial and Office Buildings into Leased Housing (Draft for Comment) (hereinafter referred to as the Notice).

Just last July, the Guangzhou Municipal Bureau of Planning and Natural Resources and the Guangzhou Municipal Bureau of Housing and Urban-Rural Development also issued the Guiding Opinions on the Renovation of Commercial and Commercial Office Rental Housing in Guangzhou, aiming at revitalizing the commercial and service properties in the Guangzhou market.

With regard to the introduction of the policy of changing the business to rent, the Shenzhen Housing and Construction Bureau responded that the State Council, provincial and municipal governments all have policies to support the business to rent, but "changing the business to rent" is a new mode of raising rental housing, which needs corresponding guiding documents to guide and standardize all aspects of decoration activities. Up to now, Shenzhen has not issued a guiding document on "commercial rent reform". In order to implement the national, provincial and municipal policy requirements, it is necessary to speed up the formulation and promulgation of this notice.

Can the stock of commercial housing usher in spring?

The "Notice" proposes that the New Deal aims to revitalize the stock of idle businesses and office buildings, standardize the transformation of existing businesses and office buildings into rental housing, and increase the effective supply of rental housing.

In this regard, He Qianru, director of Midland Property National Research Center, told the National Business Daily that changing the completed commercial and office buildings into rental projects can alleviate the pressure of vacant office buildings on the one hand and expand the supply of the current rental market on the other. The rent and circulation of the commercial-to-rental project are strictly monitored by the government, which can't be compared with ordinary commercial housing rental and government affordable housing, but it can still play a buffering role in Shenzhen's rent stability.

But for developers, the key to the transformation lies in whether the account of commercial property turning to rental housing can be calculated well.

Long Bin, an expert member of Guangdong Housing Society, pointed out to the reporter of National Business Daily that although the commercial reform of rental housing may increase the rental supply, "however, from commercial development to the construction and operation of self-sustaining rental housing, this bend has turned too big for developers, and investment calculation and market evaluation have to be repeated."

In addition, for developers, because the property of "commercial change to rent" must meet the restrictions such as overall confirmation and inseparable transfer, this means that if "commercial change to live" is chosen, the period required to realize the return of funds through housing rental income will be greatly lengthened. "So, (developers) will not necessarily give priority to this option, and it is more likely to consider some historical stock properties on hand." Xiao, chief analyst of Kerry, believes.

It is worth noting that within five years from the date of joint trial, the purpose of rental housing for renovation projects shall not be changed. Although the business-to-lease project is used as rental housing, it does not provide degrees. In this regard, He Qianru said that because this part of the rental housing does not provide degrees, it will not have a big impact on the second-hand housing market, especially in the second-hand areas with tight degrees.

Changing business to leasing may not improve the rental rate of return.

According to the latest report data released by CB Richard Ellis, the new supply of office buildings in Shenzhen on 20 19 continued to be at a high level and reached a record high, with the annual new supply exceeding 2 million square meters. In addition, the slow entry of new projects into the market coexists with the rising vacancy rate of old projects caused by tenant relocation. The overall vacancy rate of the market increased by 8.7 percentage points year-on-year, reaching as high as 20.0% by the end of the year, and the overall market showed a trend of oversupply.

Supply exceeds demand, or it will keep Shenzhen's commercial market in a state of rising vacancy rate and falling rent. Cheng, consultant of CB Richard Ellis South China, said: "In the coming year, it is estimated that there will still be more than 6,543,800 square meters of new supply entering the market, and the peak supply will continue. The overall market vacancy rate will continue to rise, and rental performance will also face certain pressure. "

Image source: CB Richard Ellis

In this context, some developers tend to transform. "It's better than being empty there. Turning to long-term rental apartments is actually a way to change inventory into rent. Some office buildings and podium buildings may not be rented out or the rent is very low because of their geographical location and height, but residential products will not be affected by this and there will be more markets. " Qiao, executive director of Colliers International Consulting Services in South China, said.

However, even if it is possible to "change business to rent", the current rate of return on renting is generally not high. In this regard, Long Bin said, "Due to the huge differences in the location and resources of different projects, it is impossible for commercial service properties to turn to rental housing. In a word, the benefit is limited, which provides a new way for the comprehensive evaluation of some projects. As for ordinary buyers, there is no impact at present. "