Top-end office rents in Beijing slip 0.4pc in Q3, says consultancy DTZ
But fall is expected to be brief, according to London-based property consultancy DTZ
Top-end office rents in Beijing dipped slightly in the third quarter of the year but the softening is likely to be temporary, according to London-based property consultancy DTZ.
It said in a report yesterday that the average rent for grade A offices in Beijing fell nearly 0.4 per cent between July and September on a quarter-on-quarter basis, as a large, new office building entered the market and a number of tenants in core business zones moved to cheaper locations.
"However, the average rent is very likely to be pushed up again next quarter," DTZ's research director for North China, Zhao Yan, said.
She added that another premium project in the expensive central business district in eastern Beijing would come into use by the end of this year, offering around 176,000 square metres of office space at relatively high rents.
Meanwhile, she said, strong demand would quickly fill up vacant offices in expensive downtown areas when tenants left after their leases expired. "Overall, premium offices in Beijing are still in short supply and this will continue for the next few years," Zhao said.
Rents for top-end offices in the capital rose rapidly between 2010 and last year, with the average nearly doubling from around 150 yuan (HK$190) to close to 300 yuan per square metre per month. Since the middle of last year, rents and vacancy rates have remained stable. According to the consulting firm, the average rent for grade A office space in Beijing stood at 296.94 yuan per square metre per month last quarter, down 0.38 per cent from the previous quarter. The total area of premium office space in Beijing reached 6.76 million square metres at the end of September. The vacancy rate rose in the third quarter, by 0.18 of a percentage point, to 1.43 per cent.
Separately, the high-end residential market in Beijing continued to grow as the effect of government tightening policies waned. The area traded rose 3 per cent quarter on quarter to 246,400 square metres.
The average selling price jumped 9.64 per cent to 49,923 yuan per square metre. DTZ said buyers were enthusiastic about upmarket projects because recent land deals had set record prices and the supply of quality projects was expected to be limited.