BEIJING: Beijing’s office market recorded positive performance in the third quarter but still faces pressure in the coming months, research from industry experts showed.

       According to Savills, an international real estate agency, Beijing’s office market saw an increase in rent and a drop in vacancy rate for the first time in the past 11 quarters.

       Domestic finance and IT enterprises pushed the net absorption of Beijing office market to a three-year high in the third quarter, according to the property market review released by JLL, another international real estate agency.

       In the office market, domestic finance and IT enterprises remained the most active entities. They drove a notable increase in leasable net absorption, reaching the highest level in a single quarter since 2018.

       Though the epidemic made the overall demand weak in 2020, the market gradually recovered in 2021, and the momentum continued to strengthen in this quarter, with 210,000 square meters newly added. Domestic-funded enterprises still served as the main drivers in the leasing market, among which the performance of finance and IT industries was strong.

       With the market witnessing continuous recovery, destocking also occurred at a faster pace, resulting in the overall vacancy rate to further drop to 12.7%. The decline of vacancy increasingly strengthened owners’ confidence in market prospects.

       On the other hand, Beijing’s rent decreased by 0.4% quarter-on-quarter in the third quarter, and the rent decline continued to narrow.

       Since the overall rent began to stabilise, more proprietors with stable project performance have raised their expectations for the future, which is conducive to promoting the rent increase later.

       It is expected that the overall rent level in Beijing will see more upward momentum by 2022, said Michael Zhang, director of Office Leasing for JLL Beijing. ― China Daily/ANN