Is the inflection point of Beijing's office building market approaching?

The continuously declining office market in Beijing may reach an inflection point in some areas.

According to the statistics of Colliers International, the net absorption volume of Beijing's Grade A office market in the third quarter of this year reached a new high for the year. The quarterly net absorption volume reached 125,000 square meters, and the market has achieved absorption for nine consecutive quarters, with an average quarterly absorption volume of 80,000 square meters. No new projects entered the core sub - markets this quarter. With a significant increase in demand, the vacancy rate dropped to 19.3%, a decline of nearly 1 percentage point from the previous quarter. It fell below 20% for the first time this year, effectively alleviating the market's vacancy pressure in the short term.

Although the trend of overall market absorption has further accelerated and the market demand side has improved significantly, the performance of each sub - market still varies. After Zhongguancun achieved the fastest cumulative absorption volume in its recorded history over four consecutive quarters, the net absorption volume of this sub - market exceeded 63,000 square meters again this quarter. This is the second time in five consecutive quarters that the single - quarter net absorption volume has exceeded 60,000 square meters. The market vacancy rate dropped significantly to 15.1%, a decline of 3.9 percentage points from the previous quarter and 4.6 percentage points from the same period last year, and a significant drop of 5.9% compared to two years ago. Among the 24 Grade A office projects monitored by Colliers International, 14 projects have a vacancy rate of less than 10%, and even 10 projects have a vacancy rate of less than 5%.

Colliers International analysis shows that as Beijing accelerates the construction of an international science and technology innovation center, benefiting from the advantages of the gradual accumulation of science and technology innovation industry clusters over the past decade, the first - mover advantage of long - term service to science and technology innovation enterprises, and the high cost - performance advantage of industrial office products, the Zhongguancun market has begun to benefit from the industrial dividends brought by the growth of new - quality productivity enterprises. With the continuous increase in new demand in the entire Zhongguancun sub - market, Zhongguancun is expected to become the first sub - market in Beijing's office market to achieve stable and rising rents. However, the scale of new office space demand released by science and technology innovation enterprises is not sufficient to drive the overall market to stabilize, and the demand side of Beijing's office market will still face continuous pressure.