Beijing office rent declines following seven consecutive quarters of growth
City-wide class A office average rent registered its first decline in Beijing, according to Savills. It was down 0.2 percent quarter-over-quarter to RMB368 per square meter per month ($54.57 per square foot per month) by the end of the first quarter 2019, although this was up 10.7 percent year-over-year.
Meanwhile, the city-wide average vacancy rate decreased by 0.1 of a percentage point over-quarter to 6.9 percent, although this was up by 0.2 of a percentage point year-over-year. A general softening in leasing demand and weakening tenant affordability was responsible for the decline in average rent. Landlords were put under pressure to adjust their rents or extend beneficial leasing terms to attract tenants. Despite average rent in prime business districts recording historically strong performances, average rents in the CBD, Zhongguancun (ZGC) and Beijing Financial Street (BFS) were down by 0.9 percent, 0.2 percent, and 0.2 percent over-quarter, respectively.