Beijing office market reports a welcome rebound
Beijing’s office market saw a steady recovery in the third quarter, with the demand from large domestic firms remaining strong and that from the multinational companies picking up as the global economy revives.
The recovery in the office market, which is reflected in the falling vacancy rate and stabilizing rent, is powerful evidence for the resurgent economy, experts said.
According to Jones Lang LaSalle (JLL), an international real estate service provider, the total net absorption of office buildings in the capital amounted to 139,100 sq m in the third quarter, which is the largest absorption recorded since the economic downturn and almost double the amount seen in each of the previous three quarters.
“Absorption was once again largely driven by the continued demand from State-owned enterprises, especially from domestic financial companies, which were aggressively expanding their presence in the capital city,” said Julien Zhang, managing director of JLL Beijing.
Within the total net absorption, 60 percent was taken by domestic financial companies, much higher than the 30 percent level seen at the beginning of the crisis in the third quarter of 2008.
The demand from multinational companies is gradually rebounding, although it was still much less than the demand from domestic firms because of the financial crisis.
Statistics from transnational real estate agency CBRE showed that NTT, Japan’s largest telecom company, recently rented 10,000 sq m of floor space at Phoenix Plaza, a Grade A office building located in northern Beijing’s Sanyuanqiao area.
Central Point, a Grade A office building located along the eastern section of Second Ring Road, has rented out more than 6,000 sq m to a number of international clients within the last two months.
Guo Fengrui, deputy manager of China Resources Land Ltd (Beijing), the developer of Phoenix Plaza, said that around 75 percent of Tower A of the office building complex had been rented in the past four months, exceeding their expectation.
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