RESIDENTIAL rents in Beijing average US$6.31 per square foot a month this year, up 21.4 per cent over last year's average, according to C Y Leung & Company. This is a staggering rental rate, even higher than Hong Kong's luxury residential rental which is around $5.11 per sq ft. That works out to $13,600 a month for a 2,152 sq ft flat in Beijing. The increasing number of foreign companies and expatriates working in the city, against a limited supply, contributed to the high rental rates, analysts said. Leung Chun-ying, managing director of the company, said the occupancy rate of foreign commodity housing units in the Chinese capital was 98 per cent compared with 90 per cent last year. He said the current rental for top quality residential units in Beijing was around $6.9 per sq ft a month. This compared with an average buyer price of $278 per sq ft. This could translate into a yield of up to 30 per cent per annum in return. In the Chaoyang district, the apartments at China World Trade Centre reported a rental of $7.43 per sq ft while Landmark Towers enjoyed a rate of $6.97. Residential rents at Hong Kong Macau Centre, Lufthansa Centre and Dong Hu Garden were at $6.50. The rental at Legend Garden Villa at the outer area at Shun Yi district was much lower at only $2.78. According to C Y Leung & Co's statistics, the number of foreign enterprises in Beijing increased to about 8,000 this year from 6,516 last year. The number of foreign enterprises in the city was only 3,453 in 1992 and 643 in 1991. Last year, average residential rents in Beijing were $5.20 per sq ft, up 14.3 per cent over the average of $4.55 in 1992. Housing rental was only $2.69 in 1991 and $2.32 in 1990. Occupancy rate of foreign commodity housing units was 86 per cent in 1992, 68 per cent in 1991 and 64 per cent in 1990. The Beijing municipal government set out strict rules to control the leasing of land and the approval of property projects in the city. As a result, analysts expected that the city's property market would continue to face an undersupply in apartments. Some expatriate businessmen are renting hotel rooms. In a recent report, Chesterton Petty predicted that more than 13,000 apartments, or more than 12.9 million sq ft, would be needed to accommodate the increasing number of expatriates working in Beijing over the next three years. New supply of apartments would amount to only about 179,300 sq metres next year, it projected. The firm said the new supply would not relieve the situation, with residential rentals tipped to appreciate by 20 to 30 per cent per annum. The expatriate population in Beijing is about 30,000. According to Beijing's estimates, the city's newly-built properties amounted to 10 million sq metres per annum in the past six years. The city has completed the construction of 217 modern residential areas, with a total floor space of nearly 40 million sq metres.
