Investment Rating - The report indicates a general positive outlook for the real estate sector in Shanghai, particularly in the context of land sales and pricing trends, with an average premium rate of only 0.49% for the latest land auction [1]. Core Insights - The sixth batch of land sales in Shanghai concluded on October 25, 2023, with a total transaction value of 14.844 billion yuan, marking it as the largest supply batch of the year aside from the first batch [1]. - The land auction included a combination of plots from Yangpu, Baoshan, and Minhang districts, with a total area of 196,800 square meters [1]. - The only plots that sold at a premium were in Yangpu district, with a total price of 3.213 billion yuan and a premium rate of 2.32% [3]. Summary by Sections Land Transaction Overview - The total transaction amount for the sixth batch of land sales reached 14.844 billion yuan, with an average premium rate of 0.49% [1]. - The land area offered was 196,800 square meters, making it the largest supply batch of the year after the first batch [1]. Specific Land Plot Analysis - The Yangpu district's K2-04 and G2-5 plots were the only ones to sell at a premium, with a total price of 3.213 billion yuan and a floor price of 69,158 yuan per square meter [3]. - The combined area of these plots was 18,600 square meters, designated for residential use [3]. Policy Context - New regulations require that any new land designated for residential development must allocate at least 5% of the total housing area for affordable housing [7].

Investment Rating - The report indicates a cautious investment outlook for the Shanghai office leasing market, reflecting a "hold" or "neutral" stance due to ongoing demand weakness and rental price pressures [1][12]. Core Insights - The Shanghai office leasing market is experiencing a recovery phase, but overall demand has not shown significant improvement, leading to continued pressure on rental prices, which have decreased by 1.2% to approximately 4.3 CNY/㎡·day in Q3 2024 [1][12]. - The average vacancy rate in the city has risen to 23.1%, marking six consecutive months of increase, driven by a surge in new project supply and a lack of effective demand recovery [10][11]. Summary by Sections Rental Trends - Rental prices across various rings in Shanghai have generally declined, with the inner ring experiencing the largest drop of 1.6 percentage points to 5.8 CNY/㎡·day [2][4]. - The average rental price in the inner-middle ring decreased by 1.2 percentage points to 3.95 CNY/㎡·day, while the outer ring and suburban areas saw average rents of 2.95 CNY/㎡·day and 2.4 CNY/㎡·day, respectively, with declines of 1 and 0.8 percentage points [2][4]. Market Dynamics - The demand for office space remains weak, with tenants opting for minimal adjustments rather than large relocations or expansions, exacerbating the imbalance in supply and demand [1][10]. - High vacancy rates persist, particularly in emerging business districts, where the supply of new projects is abundant but the demand is insufficient to absorb it [10][11]. Segment Performance - The Class A+ office segment saw a notable rental decline of 1.7 percentage points, with significant drops in specific areas like Jing'an and the Bund, where rents fell by 2.5 percentage points [8]. - Class A office rents overall decreased by 1.5 percentage points, with certain districts experiencing declines exceeding 3.5 percentage points [8][9]. - The Class B+ segment also faced a 1.6 percentage point drop, particularly in areas with intense competition and a growing number of new entrants [9]. Future Outlook - The report anticipates that while short-term rental pressures may continue due to rising supply, supportive credit policies and improved business environments could enhance liquidity and stimulate demand in the leasing market [12]. - Long-term prospects are optimistic, with government initiatives aimed at fostering business growth and improving office quality expected to stabilize the market [12].

Investment Rating - The report does not explicitly provide an investment rating for the commercial and office property market in Shanghai Core Insights - The supply of new commercial and office properties in Shanghai has decreased significantly, with a month-on-month decline of 42% in September, totaling approximately 154,600 square meters, although it remains at a relatively high level compared to the past six months [2] - The total transaction area for commercial and office properties in September saw a slight decrease of 7% month-on-month, amounting to 154,000 square meters, which is still above the average transaction area for the past six months [4] - The commercial property market showed a notable increase in transaction volume, with a 59% rise in transaction area and a 47% increase in the number of transactions, while the office property market experienced a significant decline of 58% in transaction area [4] Summary by Sections New Supply - In September, the new supply of commercial properties was concentrated in seven administrative districts, with Minhang District accounting for over 50% of the total supply [3] - The total new supply area for commercial properties was 95,400 square meters, down 16% month-on-month, while the office properties saw a supply of 59,200 square meters, down 61% month-on-month [2][3] Transaction Volume - The total transaction area for commercial properties was 59% higher than the previous month, with 352 transactions recorded, while the office properties saw a significant drop in transaction area to less than 40,000 square meters, down 58% month-on-month [4] - The commercial property transactions were primarily concentrated in Jiading, Baoshan, Qingpu, and Pudong districts, with Jiading leading with a transaction area exceeding 33,000 square meters [4] Second-Hand Office Market - The second-hand office market in Shanghai has seen a continuous decline in transaction volume for three consecutive months, dropping to approximately 37,000 square meters in September, a decrease of 17% month-on-month [9] - The central area accounted for 65% of the total transaction volume, but experienced a significant decline of over 18% [9][10] Second-Hand Commercial Market - The second-hand commercial market experienced a notable decline in transaction volume, with a 29% drop in September, totaling approximately 23,000 square meters, which is below the average for the past six months [12] - The outer districts outperformed the central areas, with commercial transactions in these areas accounting for 74% of the total volume [12]

Investment Rating - The report does not explicitly provide an investment rating for the Shanghai residential market Core Insights - The new housing supply in Shanghai has increased significantly, with 29 projects launched in September, up by 9 from the previous month, but sales remain uneven across different projects [3] - The new policy introduced on September 29 aims to optimize purchase restrictions and credit policies, potentially boosting sales, especially for new homes in areas with high inventory [3] - The second-hand housing market continues to struggle, with September transactions dropping by 19% month-on-month, although new policies may stimulate demand in October [6][7] Summary by Sections Part 1: New Residential Properties - New housing supply has surged, with a total of 29 projects launched in September, leading to a supply-demand ratio of 1.30 and an inventory increase of approximately 2.01 million square meters [3] - The transaction structure has shifted, with properties priced below 5 million yuan gaining a 5% increase in market share, while the share of 90-120 square meter properties decreased by 8% [4] Part 2: Second-Hand Residential Properties - The second-hand market saw approximately 13,000 transactions in September, a 19% decrease from the previous month, with an average price of 37,953 yuan per square meter, down by 1% [6] - The introduction of new policies, including lower down payment ratios and credit incentives, is expected to benefit buyers with limited funds, potentially leading to a recovery in the second-hand market [6][7] - The transaction structure has shifted towards lower-priced properties, with over two-thirds of transactions involving units under 90 square meters [7] Market Trends - All districts in Shanghai experienced a decline in transaction volumes in September, with some areas like Jing'an and Songjiang showing smaller declines compared to the city average [10] - Certain well-equipped residential areas, such as Qingpu New City, have seen transaction volumes increase despite the overall market downturn, driven by improved infrastructure and amenities [11][12] - The report highlights that traditional large communities are maintaining high transaction activity, with several neighborhoods in Pudong seeing increased sales [14][15]

Investment Rating - The report indicates a positive investment outlook for the Shanghai land auction market, with a focus on the recent trends in land supply and transaction prices [1][3]. Core Insights - The total transaction value in the Shanghai land auction market reached approximately 871 billion yuan by the end of September 2024, with a significant concentration of land supply in recent months [3][4]. - The fifth batch of concentrated land supply in September included two residential plots with a total transaction price of 120 billion yuan, marking a notable increase in market activity [4][5]. - The report highlights the implementation of a "double high double competition" policy for land sales, aimed at promoting healthy market development and sustainable urban growth [4][5]. Summary by Sections Overall Overview - The concentrated land supply market has seen a continuous breakthrough in total transaction amounts, with the market experiencing a cooling phase [1]. - In September, the total transaction area was only 54,000 square meters, the lowest level in nearly a year [1]. Concentrated Supply - The fifth batch of concentrated land supply included two residential plots, with a total area of approximately 50,100 square meters, representing the smallest batch of the year [4]. - The transaction price for the fifth batch reached 120 billion yuan, the highest for 2024 [4]. Normalized Supply - The normalized land supply market saw a decrease in both the number of plots and transaction area, but the total transaction price rose to a near-year high [6][7]. - In September, the total transaction price for two commercial office plots was about 30 billion yuan, indicating a trend of declining volume but increasing prices [7]. Case Analysis - A notable case involved a commercial plot in Changning District, which sold for 261.55 million yuan, the highest transaction price for commercial office land in the first three quarters of the year [10]. - Another case in the Pudong New Area involved an industrial plot sold for 42.42 million yuan, designated for high-end equipment manufacturing [11].

Investment Rating - The report does not explicitly provide an investment rating for the Shanghai residential market Core Insights - The Shanghai residential market is experiencing a mixed performance with new supply increasing while transaction volumes remain uneven, particularly in the second-hand housing sector [5][9] - The recent policy adjustments on September 29, 2024, aimed at lowering purchase thresholds, are expected to stimulate sales, especially for new homes in areas with high inventory [5][10] Summary by Sections New Housing Market - In September 2024, developers launched 29 new projects, an increase of 9 from the previous month, with a supply-demand ratio of 1.30 and an additional inventory of approximately 2.01 million square meters [5] - The proportion of new housing transactions in the 90-120 square meter range decreased by 8%, while properties priced below 5 million yuan saw a 5% increase in transaction share [6][11] Second-Hand Housing Market - The transaction volume for second-hand homes in September was approximately 13,000 units, a 19% decrease month-on-month, with an average price of 37,953 yuan per square meter, reflecting a slight decline of 1% [10] - The new policies are expected to benefit buyers with limited funds, as they include adjustments to down payment ratios and loan interest rates [10] Transaction Structure - The overall transaction structure has shifted downwards, with properties priced below 5 million yuan becoming the main transaction segment, and units under 90 square meters accounting for over two-thirds of transactions [11][14] - Despite a general decline in transaction volumes across various districts, some well-equipped residential areas have seen an increase in sales [14][15] Popular Districts and Projects - The Qingpu New City and Xuhui Fenglin areas have shown significant transaction increases, attributed to improved infrastructure and urban renewal efforts [16][17] - The report highlights that traditional large communities are experiencing high transaction activity, with several neighborhoods in the Pudong New Area making it to the list of popular projects [18][19]

Investment Rating - The report indicates a positive outlook for the Shanghai land auction market, with a focus on the fifth batch of land sales in September 2024, which achieved a total transaction price of approximately 12 billion yuan [3][4][5]. Core Insights - The cumulative transaction price in the Shanghai land auction market for the year reached approximately 87.1 billion yuan by the end of September [3]. - The fifth batch of land sales included two residential plots, with a total area of about 5.01 million square meters, marking the smallest batch of land released in 2024 [5]. - The report highlights the implementation of a "double high double competition" policy for residential land sales, aimed at promoting healthy market development and sustainable urban growth [5]. Summary by Sections Monthly Transaction Trends - In September, the total transaction area for the normalized land market dropped to 54,000 square meters, the lowest level in nearly a year [3]. - The total transaction price for the two residential plots in the fifth batch was approximately 12 billion yuan, with a premium rate exceeding 30% for one of the plots [4][5]. Regular Supply Market - The normalized land market saw a significant decline in transaction volume, with only two commercial and office land plots sold in September, resulting in a total transaction price of about 3 billion yuan [18]. - The average unit price for commercial land reached a historical second-high, only behind May 2021, indicating a price increase despite a decrease in transaction volume [25]. Case Studies - A notable case in the commercial land sector involved a plot in Changning District, which sold for approximately 2.61552 billion yuan, marking the highest transaction price for commercial office land in the first three quarters of the year [27]. - In the industrial land sector, a plot in the Pudong New Area was sold for approximately 42.42 million yuan, designated for the construction of a high-end equipment industrialization base [29].

Investment Rating - The report indicates a downward trend in the average base price of residential properties in Shanghai, with a current average of 54,308 RMB/square meter, reflecting a month-on-month decrease of 1.2% and a year-on-year decrease of 13.8% [2]. Core Insights - The transaction volume of second-hand residential properties in Shanghai for September was approximately 15,800 units, with expectations that the total stock transaction volume may fall below 14,000 units, marking a decline of over 10% compared to the previous month [4]. - Following the "527" policy, demand from first-time buyers and those upgrading has decreased, leading to reduced market liquidity, longer transaction cycles, and increased negotiation space, indicating a buyer's market [7]. - New policies issued by the Shanghai Municipal Housing and Urban-Rural Development Committee aim to enhance market confidence and stimulate housing transactions through adjustments in purchase restrictions, credit optimization, and tax adjustments [7]. Summary by Sections - As of October 1, 2024, the average base price continues to show a downward trend, with most areas experiencing an expanded decline [8]. - The areas with the highest proportion of relocation communities are seeing the most significant price drops, attributed to a large inventory of mid-to-low-end properties and a decrease in demand [9][10]. - The overall decline in property prices is more pronounced than in previous periods, with a notable increase in the number of districts experiencing price drops exceeding 2% [11].

Investment Rating - The investment rating for H World is "Buy" with a target price of HK$42.00 and US$54.00 based on a 2024E EV/EBITDA of 18x, which is 0.5 standard deviations above the historical average [7][10]. Core Insights - The hotel industry in lower-tier cities is outperforming, particularly during the Golden Week, benefiting H World due to its expansion in these areas [1][2]. - RevPAR (Revenue per Available Room) is expected to stabilize into 2025E, with easing pressure from 4Q24E due to easier ADR (Average Daily Rate) comparisons and supportive government policies [3][4]. - The hotel supply is projected to return to pre-COVID levels by year-end, with new supply normalizing in 2025E, allowing leading hotel chains like H World to capitalize on industry consolidation opportunities [4]. Summary by Sections Golden Week Performance - During the Golden Week, the hotel industry in China saw a 10.4% year-over-year drop in RevPAR, primarily due to a 13.4% decline in ADR, while occupancy (OCC) improved by 3.5% year-over-year [2]. - Lower-tier cities showed year-over-year improvements in both OCC and ADR, indicating strong leisure travel demand [2]. RevPAR Outlook - Following a high base in 3Q24E, RevPAR decline is expected to narrow on a year-over-year basis from 4Q24E, supported by government policies aimed at boosting service consumption [3]. Industry Supply Dynamics - The hotel industry's supply is anticipated to recover to pre-COVID levels by the end of the year, with new property supply focusing on product upgrades and differentiation [4]. - Despite short-term fluctuations in RevPAR, the hotel business remains attractive for franchisees due to stable cash flow and declining rental costs [4].

Investment Rating - The report does not explicitly provide an investment rating for the Shanghai residential market Core Insights - The Shanghai residential market is experiencing a contraction in new supply, with a supply-demand ratio of 1.28 and a slight decrease in new stock area to approximately 1.92 million square meters as of the end of August 2024 [3][4] - The market is characterized by a significant increase in the proportion of mid-to-high-end projects, with properties over 120 square meters accounting for 35% of transactions, up 10% month-on-month [4] - The second-hand residential market saw a transaction volume of less than 16,000 units in August, a 12% decrease month-on-month, with an average transaction price of 38,396 yuan per square meter, down 1% [9][10] Summary by Sections New Commodity Residential Market - New supply continues to shrink, with 20 projects launched in August, a decrease of 3 from the previous month, and a focus on outer ring areas, which accounted for 60% of new launches [3] - High-priced projects (over 100,000 yuan per square meter) are gaining traction, with several projects selling out quickly [3] Second-Hand Residential Market - The second-hand market is in an adjustment phase post-policy release, with heightened price sensitivity among buyers, leading to longer transaction cycles [9] - Despite the decrease in transaction volume, demand remains healthy, with a stable number of listings around 200,000 units [9][10] Market Demand and Preferences - The market is primarily driven by first-time buyers, with an increase in demand for larger units, particularly in the 90-150 square meter range, which now accounts for over 31% of transactions [10] - Areas with better pricing and amenities are more favored, with certain districts like Huangpu and Xuhui showing resilience in transaction volumes despite overall declines [14] Popular Districts and Projects - Notable districts with increased transaction volumes include Pudong and Xuhui, with specific projects like Tangqiao and Fenglin showing significant month-on-month growth [15][16] - The report highlights that areas with established living facilities, such as Chongming and Jinshan, are also performing well in terms of sales [14][19]