Vacancy rates in Beijing office and retail markets declined
On July 11, First Taiping Davis released a study report on the real estate market in North China in the first half of 2018. In the first half of the year, the real estate market as a whole showed a steady and orderly trend of development, with rents rising and vacancy rates declining in office buildings and commercial retail markets.
According to the market survey conducted by First Taiping Davis Research Department, in the first half of 2018, the supply of new Grade A office buildings in Beijing was limited, and the rental demand from the financial, technological and professional services industries remained stable, which continued to reduce the vacancy rate of Grade A office buildings in the whole city by 0.9% to 5.8% year on year. Decrease by 0.7 percentage points.
The core business district is affected by the lack of supply, and the vacancy rate remains at a low level. The Wangjing sector is the most prominent non-core business district, with large-scale leasing as the main transaction area, and the speed of de-industrialization is faster. The average rent of the whole city has increased annually for five consecutive quarters, rising by 3.6% and 7.5% respectively, reaching 355.0 yuan per square metre per month.
Anthony McQuade, chairman of Taiping Davis North China, said: "The residential market continues to adhere to precise regulation, but the volume of second-hand housing has begun to rebound, and the favorable financial policy has created a more relaxed financing environment for the residential rental market. In terms of investment market, transactions are mostly concentrated in scarce projects and sub-centers in urban core areas. It is expected that in the future, real estate will still be able to offset the impact of economic fluctuations and continue to develop in a healthy and orderly manner.
McAnton predicts that the second half of the year will usher in a small supply peak, a large number of high-quality projects will effectively release market demand, enterprise upgrading, expansion needs are expected to be met. Driven by economic growth and industry innovation, office demand in different industries is expected to be adjusted to varying degrees. IT and high-tech industries will continue to maintain a good momentum of development, especially those enterprises that obtain financing or achieve IPO, will have a strong need to upgrade the office environment; the financial sector opening policy introduced this year will also stimulate the rental demand of foreign financial institutions.
At this stage, the retail industry is in a period of alternation between the new retail and the old model. In the short term, rapid replication and expansion of the new retail model is a major trend of upgrading the traditional retail industry. Commercial projects will also increase the re-positioning and optimization of the internal space, providing more attractive scenario experience for consumers, and thus achieving the promotion of spatial value.
The agency believes that in the second half of the year, the housing market in Beijing will continue the first half of the market situation, the overall price will tend to be stable, and the turnover will rise steadily. The market will usher in a large number of co-ownership housing and price-limited housing. These two types of housing will play a positive role in the healthy and stable development of the property market.
