Companies flee high rents and traffic in prime Beijing areas
An increasing number of foreign and local enterprises have been moving their offices out of Beijing's central business zones to remote new office areas to escape punishing traffic and high rents.
"Geographically, office options in Beijing are decentralising," said Martin Chavez, head of commercial in Beijing at Cushman & Wakefield, a commercial real estate services company.
Big names that have joined this trend include Siemens, Intel, IBM, Hewlett-Packard, Nestle and Mercedes-Benz, which have moved from the central business district in the city's east to places like Wangjing in the northeast and Zhongguancun in the northwest in recent years.
"They are very well established companies. They don't mind moving to a relatively remote place where traffic jams are not that serious and rents are only two-thirds or even half [of those in prime areas]," Chavez said.
In the first quarter of this year, average rents in Beijing's CBD and Financial Street, the two most expensive business zones in the capital, were 351 yuan (HK$440) and 564 yuan per square metre a month. By contrast, those of Wangjing and Zhongguancun were 252 yuan and 267 yuan per square metre, data from Cushman & Wakefield shows.
So far, most companies that have chosen new office areas are generally involved in technology, manufacturing, pharmaceutical, vehicle or media sectors. Sometimes they opt to leave a small office in the CBD.
Eric Hirsch, head of property consulting firm JLL's commercial business in Beijing, said he also sees the same trend.
"It helps Beijing offer different categories of offices to meet various needs," he said.