Large-scale departures from Beijing city centre leave gaping hole in office towers
- ‘Office rents in the central business district have declined by 20 to 30 per cent from a year ago because the economy is bad,’ Beijing-based real estate agent says
Beijing’s office market is reeling from the departure of large state-owned enterprises (SOes) and tech giants from the city centre, causing rents to decline as much as 30 per cent lower from a year ago, according to market observers.
The slump is likely to persist, as the relocation of large office occupiers, aimed at reducing Beijing’s “noncore” functions, has freed up significant commercial real estate, they said.
As a result, Beijing’s overall office vacancy rate has reached the highest level among China’s first-tier cities, hitting nearly 18 per cent in the second quarter of 2024, according to a report published this month by the China Real Estate Information Corp (CRIC). Rents fell by 3.7 per cent quarter on quarter to 9.23 yuan (US$1.27) per square metre per day.
“Office rents in the central business district have declined by 20 to 30 per cent from a year ago because the economy is bad, foreign-owned businesses are leaving, and businesses are [generally] struggling to stay afloat,” said Ma Xiaoyu, a Beijing-based real estate agent.
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Landlords of office towers in the central business district experienced a surge in vacant spaces as major SOEs, like Sinochem Holdings and China Huaneng Group, have moved their headquarters to the Xiongan New Area, located about 100km southwest of the capital.
