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Kenneth Ko

IN spite of increasing supply, expatriate housing costs in Beijing are expected to continue rising 20 to 30 per cent annually over the next three years, according to a new report.

  New supply of apartments in Beijing will amount to 2.15 million square feet in 1994, 1.93 million sq ft in 1995 and three million sq ft in 1996, according to real estate property consultants Chesterton Petty.

  But experts say it will only partially satisfy the growing demand from multinational companies seeking appropriate accommodation for their executives.

  With the expansion of foreign companies in Beijing, Chesterton Petty forecasts more than 13,000 apartments, or more than 13 million sq ft, will be needed to accommodate them over the three years.

  The expatriate population in Beijing is now said to number 30,000.

  Statistics show more foreign investment companies were set up last year than in the previous 14 years.

The problem lies in the fact that foreigners are expected to live in designated developments, whether it be a hotel, flat, serviced apartment or free-standing house.

  Most expatriates would love to rent houses or flats, but because of a chronic shortage, the bulk have to make do with living in the 200 three or four-star hotels.

  Richard Price, representative for property consultants Brooke Hillier Parker in Beijing, said the under-supply allowed landlords to pluck rental figures out of the air whenever a unit became vacant.

  Chesterton Petty claims average apartment rents have already jumped 25 per cent this year, from HK$25 to $33 per sq ft a month.

  But anybody taking out a lease today will probably find themselves charged even more than this.

  Flats in East Lake Villas are now said to be more than US$5.50 per sq ft per month. The China World Trade Centre is said to be quoting US$5 per sq ft and Capital Mansions US$4.40 per sq ft.

  But worst of all is the Lufthansa Centre, which is now said to be asking a record US$6.70 per sq ft.

  That works out at a shocking HK$105,000 a month for a 2,000 sq ft flat, more than most properties on The Peak.

 Chesterton Petty reckons the situation is going to get worse because of the under-supply, with average apartment rents reaching HK$43 a sq ft by 1996.

  Such high rents are providing excellent investment yields for anyone fortunate enough to own property zoned for expatriate rental.

  Agents said investment yields of around 20 to 25 per cent were currently available, though Chesterton Petty predicts this will decline gradually to 17 per cent by 1996 as more people are tempted to buy apartments.

    Prices of completed apartments in Beijing are about HK$1,230 per sq ft, with some more than HK$1,430.

  The appreciation of apartments' capital values has been reflected in the pre-sale market where values of unfinished apartments have exceeded $1,800 per sq ft, representing an appreciation of more than 40 per cent in values.

  Chesterton Petty says the new supply of apartments will not relieve the under-supply situation and prices could reach about $3,600 per sq ft by 1996.

  Against rising residential values, office and rental prices in Beijing are also tipped to enjoy an increase of 30 to 40 per cent per annum over the next three years.



Home costs for expats in Beijing rocketing