Beijing office rents rose for the first time in three years in the first quarter, Jones Lang lasalle said

2022-06-12 0 By

Beijing’s office rental market recovered strongly in the first quarter, with rents rising for the first time in three years, according to a report released by Jones Lang lasalle today.Citywide vacancy rates continued to decline, closing at 10.2%, the lowest level in the past 10 quarters.Zhang Siliang, director of Beijing commercial real estate at Jones Lang lasalle, expects the full-year rental growth to reach 6.7% in 2022. The market will continue to be active, but demand momentum may temporarily slow in the middle of the year as overall rents recover.According to the report, demand in Beijing’s office leasing market continued to strengthen in the first quarter, with total net absorption approaching 157,000 square meters — more than double the total net absorption in 2020.Rental demand above 8,000 square meters contributed particularly to market transactions, accounting for 55% of the total leased area.In the first quarter, the expansion demand of financial enterprises stimulated the vitality of the leasing market. A well-known domestic financial enterprise continued to expand in Lize district, signing a new contract of over 30,000 square meters.Meanwhile, demand from TMT and the big health sector is also driving the rental market up in the first quarter.The overall vacancy rate in Beijing’s office market declined in the first quarter to 10.2%, the lowest level in the past 10 quarters, according to the report.The Lize sub-market saw a 7.5 percentage point drop in vacancy, the largest quarter-on-quarter drop in vacancy in the first quarter.At the same time, rents began to recover in full swing.The overall market rent reached an inflection point in the first quarter, turning from negative to positive and increasing by 1.2% quarter-on-quarter.All nine sub-markets have seen flat or positive rent growth, with Lize recording the largest month-on-month increase (7.5%).Zhang siliang predicted that Beijing’s class A office market will continue to achieve further recovery in 2022, as the favorable market window for tenants closed last year and is now a balanced market.Annual rent growth is expected to reach 6.7% in 2022.The market will continue to be active, but demand momentum may temporarily slow in the middle of the year as overall rents recover.