Beijing Economic Data

Review and Prospect of Beijing real estate market in the first quarter of 2021 From CBRE

The following is the Review and Prospect of Beijing real estate market in the first quarter of 2021 From CBRE recommended by And this article belongs to the classification: Beijing Economic Data.

In the first quarter of 2021, three new projects in Olympic sports, Shijingshan and Xizhimen were put into use, bringing a total rental area of 153000 square meters to the office market.

In this quarter, TMT, finance and professional services continued to rank among the top three in the new rental demand of office buildings. Among them, TMT’s new rent demand accounts for as much as 43%, which is mainly reflected in the rent expansion demand of head enterprises such as new media, online education and terminal applications; the upgrading and renewal of law firms in the professional service industry are active; the fund and insurance sectors of Finance continue to make efforts, and the rent expansion and relocation demand is mostly located in the central business district, while the rent expansion demand of financial technology and asset management enterprises also increases. In addition, the pharmaceutical and Life Sciences, energy and other industries also recorded leasing transactions of upgrading and relocating and setting up offices in the Beijing market.

Strong demand led the net absorption of the whole city to maintain an upward trend for three consecutive quarters, recording 166000 square meters, a month on month growth of 13%. Among them, CBD benefited from the large volume of upgrading and relocation demand, the acceleration of Grade A office market and the large-scale rent expansion of Lize technology enterprises. The two major sub markets together contributed 71% of the city’s net absorption. In addition, except for Wangfujing business district, which has a large area of retreat due to the integration of state-owned enterprises, the de marketization of other sub markets has improved on a month on month basis.

The overall vacancy rate of the whole city decreased by 0.4% to 17.5% on a month on month basis, which was also the first decline since the second quarter of 2018. The overall average rent of office buildings decreased by 0.4% to 403.8 yuan per square meter per month compared with the sample. Although the overall rent continued to decline, the number of rent reduction projects has gradually decreased; Wangjing has become the first sub market for rent recovery thanks to the strong demand of TMT industry.

In the next six months, ten new projects are expected to enter the market with a total area of nearly 780000 square meters, which is expected to boost the vacancy rate.

“Although CBD and emerging regions will still face the competitive pressure brought by new project delivery in the short term, the demand fundamentals of the office market are expected to be further consolidated and enhanced during the 14th Five Year Plan period with the blessing of high-end industries and the rapid development of digital economy.”

In the first quarter of 2021, there was no new supply in the Beijing business park market, and the delivery of some projects originally planned to enter the market was postponed to the middle of this year.

With the stability of the epidemic situation and the full development of business activities, the overall demand of Beijing Business Park continued the active trend of the last quarter, with a net absorption of 154000 square meters. Although the month on month decrease, it is still significantly higher than the average level before the epidemic. The sub markets of Haidian region are still the first choice for many head and technology enterprises, maintaining a rapid de industrialization speed; the sub markets of Fengtai Science and technology park are relatively active in the quarter, attracting a number of tenants of technology Internet, medical and life sciences and professional services.

During the quarter, more than half of the new rental demand in the overall market came from TMT industry, and the demand related to industrial products manufacturing, transportation and warehousing, professional services and life science industry was also relatively active. The overall market vacancy rate dropped 2.5 percentage points to 19.1% on a month on month basis, and the average rent quotation of the whole city dropped 0.4% to 161.7 yuan per square meter on a month on month basis. The performance differentiation of each sub Market: the sub markets of Shijingshan, Shunyi, Daxing and Yizhuang still face relatively large vacancy pressure and continue to reduce rents; the rents of Fengtai Science and Technology Park and Electronic City sub markets basically remain stable, while the rents of Zhongguancun Software Park, Shangdi and Dongsheng science and Technology Park sub markets increase slightly under the limited rentable area.

In the next six months, sub markets such as Beiqing Road, Fengtai Science and Technology Park, economic development zone and Shijingshan are expected to welcome a total of 636000 square meters of new supply, which will increase the pressure of decontamination in the region.

“Beijing’s 14th five year plan defines new generation of information technology, medicine and health, new energy intelligent networked vehicles, green and smart energy as the development direction of key industries in the future, and defines a number of future key development new areas and regional industry development subdivision directions, which will further empower the development of business parks.”

In the first quarter of 2021, there was no new retail market in Beijing. During the quarter, Cuiwei building, located in the West Chang’an business district, was closed and upgraded. This is the second consecutive quarter in which the old department stores were closed for renovation.

The overall demand for new rentals picked up, and the passenger flow of large-scale comprehensive shopping malls returned to the pre epidemic level. Chain restaurants and new energy vehicle exhibition halls continue to release the demand for shopping centers. Internet Omni channel collection stores, mainly represented by KK hall, KKV, wow color and hotmaxx, open new stores in many shopping centers, but the traditional retail formats recover relatively slowly in the season. The first store activity of foreign brands in Beijing has not yet returned to the level before the epidemic, but a number of first stores of domestic fashion clothing, tea and local food brands have entered high-quality projects with young and mass consumption orientation. The operation of parent-child interaction and education business returned to normal, which led to the increase of people flow in some core and regional representative shopping centers.

The overall market vacancy rate fell 0.1 percentage point to 10.4% on a month on month basis. Affected by the epidemic, the digestion of vacant areas of projects with obvious rent refund is still slow. The peripheral regional shopping centers represented by Longhu Changying Tianjie, Daxing Dayue chunfengli and Beijing Huiju are outstanding. By introducing regional first stores to upgrade the tenant structure, linking with cultural IP to carry out brand exhibition, and strengthening the youth attribute of the project with immersive experience, the attraction to tenants is greatly enhanced. Under the polarization of the project performance, the first floor rent of the overall shopping center slightly increased by 0.2% compared with the sample to 36.3 yuan per square meter per day.

In the next six months, five shopping centers with a total volume of 327000 square meters are planned to open, all of which are distributed in non centralized business districts. With the further increase of shopping mall passenger flow, the rent is expected to rise slightly.

“During the 14th Five Year Plan period, Beijing will be further built into an international consumption center, vigorously introducing the brand” first store “, realizing the integration of online and offline consumption, and building a number of new consumption experience museums, which will be conducive to the internationalization, experience and omni channel development of the retail property market.”

No new projects will be delivered in the first quarter of 2021, and some future projects entering the market this year have started pre leasing.

Despite the scarcity of rentable area, the rental demand of fresh e-commerce and third-party logistics increased instead of decreasing, with the net absorption nearly tripled to 44000 square meters on a month on month basis. At the same time, the market recorded leasing transactions from cold chain operators.

The overall vacancy rate of Beijing warehousing and logistics market decreased by 1.7 percentage points to 1.7% on a month on month basis, and dropped to less than 2% for the first time since the first quarter of 2019, making the situation that supply exceeds demand more prominent. As fresh food tenants have higher requirements on distribution distance, efficiency and loss, they prefer to choose a location in Beijing and are willing to pay higher rents. A number of transactions in the quarter show that the project rents have increased significantly compared with before. The average rent of the whole city has accelerated by 1.4% month on month to 51.7 yuan per square meter per month. In the Beijing market, Tianjin market has attracted a large number of fresh e-commerce distribution with its huge consumer base, further boosting the net absorption.

In the next six months, it is estimated that two projects with a total area of 161000 square meters will be added to the market, which will moderately ease the current contradiction between supply and demand, and the “empty cage for birds” and tenant renewal of existing properties are expected to become more active.

“The 14th five year plan released at the beginning of this year proposes to support qualified logistics parks and key enterprises to introduce special railway lines, to support the use of industrial plants to transform the construction of cold chain logistics infrastructure, and to develop intelligent three-dimensional warehouses; and to support the development of logistics facilities around the airport economic zone of Daxing airport, which is oriented by aviation technology, aviation logistics and other industries, as well as national logistics hub and intelligent logistics demonstration zone The plan will also be issued in the near future, and these measures will inject vitality into the development of logistics real estate in Beijing. “

In the first quarter of 2021, Beijing reached a total of 10 block transactions, with a total transaction volume of 20.91 billion yuan, up 40.0% on a month on month basis and 3.8% on a year-on-year basis respectively. The trading activity further improved, and became the highest trading volume market in China in this quarter.

Science and technology enterprises are actively purchasing office buildings for their own use, and investors are optimistic about the future leasing prospects of buildings with science and technology enterprises as the main tenants. As a result, Zhongguancun business district and its radiated Shangdi, Zhongguancun Software Park, Beiqing road and other business parks completed four office transactions in this quarter, accounting for 35% of the total investment. The other two office transactions are properties with stable cash flow, which are respectively located in the East 2nd Ring Road and Fengtai Science and Technology Park, and purchased by domestic real estate funds and insurance funds, accounting for 29% of the total investment. Both hotel and retail properties recorded transactions, accounting for 16% and 7% of the total investment respectively, of which the retail property will be converted to office use. With the recovery of investment demand and rental fundamentals, asset prices also remained stable. After the capitalization rates of office buildings and retail properties increased at the end of last year, they stabilized at 4.2% and 4.5% respectively in this quarter, while the capitalization rate of logistics real estate remained at 5.0%.

From the perspective of location characteristics, the proportion of emerging regions in total investment has further increased to 59%. In addition to the active private use buyers, there were also three major transactions of investors purchasing properties with stable cash flow in emerging areas in this quarter, which were respectively located in Zhongguancun Software Park, Fengtai Science and Technology Park and Tongzhou, reflecting the attraction of such property to investors due to its higher return on investment and greater value growth space.

“After the stabilization of the domestic epidemic, the promotion of foreign personnel’s trading in Beijing has gradually returned to the right track, which helps foreign investors who have been silent for a while to become active again in the short term. As the market heats up, the bargaining space for projects under discussion is expected to be reduced. Beijing’s “fourteenth five year plan” will release the favorable signals of industrial positioning and policies for the development of the new area, promote the improvement of business resources and atmosphere in emerging regions, and attract more investors. ” More reading: CBRE: review and Prospect of Beijing real estate market in the third quarter of 2020 CBRE: review and Prospect of Shenzhen real estate market in 2018 CBRE: Census of Shanghai office tenants in 2020 CBRE: review and Prospect of Beijing real estate market in the first quarter of 2019 CBRE: the west end of London becomes the most expensive office area in the world in 2013 100 pounds per square foot CBRE: Shanghai real estate market in 2018 CBRE: Q3 Chongqing real estate market in 2018 CBRE: total investment in industrial real estate industry in the first three quarters of 2017 $85.8 billion CBRE: office cost guide for Asia Pacific region in 2017

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