(Yicai) Jan. 12 -- The transaction value of commercial real estate assets in Shanghai in the fourth quarter of last year accounted for 49 percent of the city’s total throughout 2023, according to a research report.

The total transaction value of commercial properties in the eastern Chinese city rose nearly 13 percent to CNY94.1 billion (USD13.1 billion) from the previous year, according to a report released yesterday by UK real estate and investment management service provider Jones Lang LaSalle. The figure for the fourth quarter totaled CNY46.1 billion.

Financial buyers performed commercial real estate property transactions worth 71 percent of the total last year, much higher than the ratio of between 30 percent and 60 percent in the previous three years, JJL data showed. Among them, 94 percent were Chinese financial buyers.

Domestic buyers will continue to dominate the market in the future, said Cai Feng, co-head of the capital market department at Cushman & Wakefield East China. Foreign buyers will likely remain inactive in the first half of the year because of the recent interest rate hikes by the US Federal Reserve and gradually return from the second half when the Fed is expected to begin cutting interest rates, Cai added.

Nearly one-third of the total property transaction volume in Shanghai was for office assets last year, according to JJL. The sale of three Wanda Plazas accounted for about 6 percent of the total transaction value.

More high-quality assets in Shanghai’s core business districts will be put up for sale this year, keeping the market active, Cai predicted.

State-owned enterprise buyers have been very active since 2022, as their ratio to the total has gradually increased in the past two years, according to C&W. Last year, SOEs and technology, media, and telecom firms accounted for 55 percent of the total turnover of self-use property buyers.

State-owned Bank of Beijing recently bought the Greenland Marriott Hotel in Shanghai’s Huangpu district for CNY1.5 billion (USD208 million). According to industry insiders, the lender plans to transform the hotel into an office building.

Editors: Shi Yi, Futura Costaglione