Beijing Office Rents Stop Falling Online Education Enterprises Rent Back Impact?

"Dark time" is gradually far away. In the third quarter of this year, Beijing office market continued to recover.

According to the data recently released by Colliers International, the net absorption of Grade A office buildings in Beijing has reached a record high for two consecutive quarters, and it has remained at a high level in the third quarter. After nine consecutive quarters of decline, the rent has experienced a slight rise, and the vacancy rate has further decreased.

The overall market tends to be stable, but the undercurrent of some regional markets is surging. In the third quarter, due to the influence of the "double reduction" policy, online education enterprises concentrated to cancel rent, resulting in a negative net absorption of office buildings in Shangdi District of Beijing. Wangjing Jiuxianqiao and Zhongguancun regions were also relatively affected by the large number of online education enterprises.

Lu Ming, director of North China Research Department of Colliers International, further pointed out that the impact of online education enterprises' rent withdrawal on the whole market is very limited, and the market can be repaired in a short time.

The effect of online education enterprise rent back on the whole market is very limited, and the market can be repaired in a short period of time. Visual China

Market demand returns to normal

If the time is pulled back to the end of 2020, Beijing office market is a gloomy cloud.

By the end of 2020, the data showed that the vacancy rate of Beijing office market reached 19.4%, a new high in nearly a decade; At the same time, the rental level of the office market dropped from 383 yuan / month / square meter at the end of 2019 to 351 yuan / month / square meter, a decrease of 8.4%, which also reached a new high in nearly 10 years.

At that time, the Beijing office market was affected by factors such as excessive supply, industrial structure adjustment and epidemic situation, which could be described as unprecedented coldness.

However, the state of the market did not return instantaneously due to the arrival of the new year. On the one hand, it was the rising net absorption, on the other hand, the rent level decreased month on month.

According to Colliers International data, in the first quarter and the second quarter of 2021, the net absorption of Grade A office market in Beijing is 260000 square meters and 370000 square meters respectively. In the first half of the year, the accumulated amount of consumption has reached the historical average level of annual net absorption. At the same time, this is the first time that more than 200000 square meters of market has been removed in two consecutive quarters in recent ten years.

In terms of the rent level, the average rent of Grade A office buildings in Beijing will continue to drop to 344.8 yuan / month / square meter and 340.8 yuan / month / square meter in the first quarter and the second quarter of 2021.

However, we should also see that the decline in rent is indeed gradually narrowing.

In the third quarter of 2021, the return of Beijing office market is more obvious.

According to collier international data, after nine consecutive quarters of decline, the rent of Beijing office market has stabilized, with an average net effective rent of 341.1 yuan / month / square meter, up 0.1% month on month. Colliers International expects that the window period of market rent adjustment is coming to an end, and the rent is expected to rise more significantly in the fourth quarter or the first quarter of 2022.

In terms of vacancy rate, the vacancy rate of Grade A office buildings in Beijing rose for several consecutive quarters, and then began to decline in the second quarter of 2021. In that quarter, the vacancy rate dropped to 18.2%, which continued to the third quarter. According to collier international statistics, in the third quarter, the vacancy rate of Grade A office buildings in Beijing was 16.7%, down 1.5 percentage points month on month.

The decline in vacancy rate was mainly due to the high absorption of office market in the past two quarters. According to the data of Colliers International, in the third quarter, the net absorption of Grade A office buildings in Beijing was 215000 square meters, still maintaining a high level of demand.

Lu Ming said that market demand for Grade A office buildings in Beijing has actually returned to normal. Xie Chen, head of CBRE's China Research Department, also believes that the rebound in the commercial real estate market has arrived as scheduled.

It has little impact on the overall market

Under the "double reduction" policy, how does the centralized rent back of online education enterprises affect the Beijing office market?

According to the statistics of collier international, some sub markets are greatly affected by this in the short term. In the third quarter of this year, the net absorption of Shangdi Industrial Park in Beijing was - 30000 square meters, a decrease of 65000 square meters on a month on month basis. In the past four quarters, the average net absorption of Shangdi Industrial Park was 45000 square meters.

The rent and vacancy rate also fluctuated. The rent fell to 173.1 yuan / month / square meter from 176.1 yuan / month / square meter in the last quarter, and the vacancy rate increased from 5.4% to 6.8%.

It should be noted that the rent of Shangdi Industrial Park has always been at a high level, and the vacancy rate has always been lower than the average level. Under the influence of "double reduction", the regional rent is still higher than the average market rent of the industrial park, and the vacancy rate is also lower than the average level of 16.7% in the whole city.

In addition to the Shangdi area, there are also a large number of online education enterprises in Wangjing Jiuxianqiao area and Zhongguancun area. According to Colliers International data, in the third quarter, the net absorption of Grade A office buildings and industrial parks in Wangjing Jiuxianqiao region was 12000 square meters, a decrease of 50000 square meters on a month on month basis; The net absorption of Zhongguancun area was negative 8000 square meters, with a decrease of 20000 square meters on a month on month basis.

However, Colliers International also points out that the impact of online education enterprises' rent-back is mainly concentrated in class B buildings and industrial park projects, with less impact on Grade A office buildings and little impact on the overall market.

"Moreover, online education enterprises are generally concentrated in markets with low vacancy rates, such as Wangjing Jiuxianqiao, Shangdi, etc., and the large-scale withdrawal just provides space for other enterprises to increase their office demand. At the same time, most of the areas that online education enterprises quit have brand-new decoration and office furniture, so such areas are very popular with Internet enterprises after they are put into the market," Lu Ming said, Except for a small number of "professional" teaching and training buildings, the owners generally hold an optimistic attitude and have not been excessively worried about the subsequent leasing.

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