Beijing Office Realty to See Supply Boom
Beijing's office realty market will see a new supply peak driven by the thriving high-tech sector, property industry data showed. According to a recent report issued by Cushman & Wakefield, a commercial real estate services provider, the Beijing office realty market will see about 3.46 million square meters of new supply from this year to 2025. Some 1.4 million sq m, or 40.4 percent, of it will be made available this year. A report from property agent Savills also predicted that there will be more than 1 million sq m of new supply in Beijing's office realty market this year. In the first quarter of this year, high-tech companies led the office realty market in Beijing, with new, relocated, and expanded leases of high-tech firms accounting for 34.2 percent of the total leased space in all sectors, according to the Cushman& Wakefield report. A recent CBRE report also said that technology hubs recorded strong leasing and investment activity in the first quarter. It said the technology, media, and telecom (TMT) sector, and the finance and business service sector have driven up overall net absorption of office space, which increased 13 percent quarter-on-quarter to 166,100 sq m, the third consecutive quarterly gain. TMT accounted for 43 percent of total leasing volume. According to the CBRE report, several deals were concluded at tech center Zhongguancun, where an office submarket and neighboring business parks collectively account for 35 percent of total investment volume. Technology firms have shown strong demand for offices for self-use, while other investors targeted office buildings at tech hubs, the report said. Ten new projects, totaling 780,000 sq m in space, are due to come on stream over the next six months, and likely to push up vacancies. However, the CBRE report said: "While new supply will exert more pressure on rents in the central business district and emerging areas in the short term, the development of high-tech industries and the digital economy during the 14th Five-Year Plan period will augment Beijing's medium-and long-term office market fundamentals."
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