China’s office market to see slow recovery in 2023 after slumping to 14-year low last year, as Beijing eases tech crackdown, analysts say
- Several big firms have been adjusting their budgets and goals, which will lead to an expansion in businesses and workforce, resulting in an increase in demand and leasing volume, JLL executive says
- Forecast comes after an almost 69 per cent decline in the overall net absorption volume for offices in 18 major Chinese cities last year
“In our observation, several giant companies have been adjusting their budgets and goals, seeking new growth points, which would bring an expansion of businesses and the workforce, leading to an increase in demand and leasing volume,” said Mi Yang, head of office research for JLL China.
The forecast comes after the Covid-19 pandemic, an economic downturn and a crackdown on the technology industry led to an almost 69 per cent decline in the overall net absorption volume for offices in 18 major Chinese cities last year, according to international property consultancy CBRE. Office space take-up fell to 2.34 million square metres in 2022 compared with 7.53 million square metres in 2021, also the lowest level since 2009, according to CBRE.
“The office rental volume driven by technology companies in the cities we track slumped over 50 per cent last year compared with 2021, sending the overall office demand in the country to a historical low in 2022,” said Shirley Hu, senior director of China research at CBRE.