As a barometer of the real economy, the market performance of the writing building has received considerable attention. In recent days, a survey conducted by securities times journalists on the market for writing buildings in several key areas of beijing has revealed that most of the rents for writing buildings are subject to bargaining space, with some of them having greater bargaining space。
According to industry sources interviewed by the securities times, the market demand for the beijing writing building has been weak since last year, and competition for customers between the writing buildings and the neighbouring business circles has intensified, leading to substantial rent cuts. However, since the spring, the market has recovered in dynamism and there has been a marked increase in the number of businesses looking at housing, and market demand is expected to increase more significantly this year than last year, rents will continue to trend downwards in the first half of the year and is expected to stabilize in the second half。
Greater bargaining space for rental of part-written buildings
Beijing financial street (000402) business circle has been the preferred office space for high-quality financial enterprises, with the highest rental rates for writing buildings. According to deeds leung statistics, the rent of the financial street building was $562. 93 per square metre/month in the fourth quarter of last year, equivalent to $18. 76 per square metre/day。
The beijing financial street writing building. Zhang da/po)
According to liu, an operator of a commercial real estate brokerage firm, a reporter for the securities times, the majority of the new buildings are offered around $20/m2/day for a new building, possibly $17,18/m2/day; for 18,19/m2/day, the offer is about $15/m2/day。
Another staff member at the rental centre of a level-a writing building in financial street also indicated that the average price of the security times building was now about $18 per square metre/day, and that the rent could be discussed later, depending on the qualifications of the company, the length of the lease and the manner of payment。
The central business area (cbd) rent for writing buildings has fallen considerably in recent years. Data from the deeds leung company show that the rent of the beijing cbd was $335. 83 per square metre/month in the fourth quarter of last year, with a vacancy rate of 13 per cent。
“a level a writing building, of which i know, has a vacancy rate of around 15 per cent, is now offered at a price of $15 per square metre per day, but close to $8,9 per square metre per day.” wang xiao, a write-in agency, told the securities times reporter that there was a high-priced writing building on grandview road, which offered $12 per square metre per day last year, and finally spoke of $9 per square metre per day at the end of last year, which was a rent-free term。
Some companies moved from financial street to lizette
In an investigation at the financial street building, a number of brokers mentioned that some businesses moved from financial street to the reza commercial area。
[lisser financial business zone] zhang da/po)
“there are a number of financial companies that may be affected by the economy, whose profitability has declined and the rent on the financial street is more expensive, and they want to switch to the reisawa business district.” liu xiao, an operator of a commercial real estate broker, said to the securities times journalist。
The staff member at the rental centre of a level-a writing building in financial street mentioned above also indicated to securities times journalists that, owing to the poor market as a whole, some of our clients in the building moved to the reiser business area, where the rent was cheaper, at approximately $6,7 m2/day。
And li, a broker in charge of reza, told the securities times reporter that he had recently seen more clients, that she had rents ranging from $5 to $7 per square metre per day, and that some new projects could even be negotiated at $5 per square metre per day. “the last two years have been basically financial street spills, because this is a relatively new writing building and the rent is almost two thirds lower than financial street.” he said。
“it is true that some financial enterprises, including insurance, coupons, trusts and other financial companies, have moved from the financial street to the rizé building.” lee, head of the research department for the northern part of the first taiping davidshua district, wanted to interview the times reporter。
With regard to the reasons for the relocation of businesses, li wishes to state that the reiser business zone was first designed to become the second financial street to cover the spillover of financial street demand, which has been adapted for the last three to four years to a diversified recruitment strategy in different industries and backgrounds. In the future, with the opening of the subway line between lizard and financial street, there has been a significant increase in the opportunities for the circulation of elements in both business circles, and it is expected that more businesses will come out of the financial street and move some sector or one branch to lizard。
Sun zou zheng, the head of the research department of the northern district of sbw, told the securities times journalist that it was a common corporate leasing strategy in recent years to relocate some of the business's original office space needs on the financial street to liza. This is mainly due to the fact that, as an emerging business circle, the newly created writing building has an advantage in quality and lower rental costs. According to sbon weiss, the relocation of enterprises from the lower-quality writing building on the financial street to the risawa-a write building would yield more than 60 per cent rent savings, and the relocation would simultaneously meet the two main needs of “deductive” and “downgrade”。
“however, advantages such as easy access to the financial streets and close proximity to financial regulators remain attractive to large financial institutions, so many enterprises have adopted a leasing strategy to relocate the back-office sector to lizette, leaving the front and head office on the financial streets.” sun zuzeng said。
According to deed leung, in the fourth quarter of 2023, the rent in the first level building on financial street was $562. 93 per square metre/month, leaving a vacancy rate of 5. 3 per cent, while the rent in lizette was only $181. 19 per square metre/month, leaving a vacancy rate of 34. 7 per cent。
In addition to the non-core sector that some enterprises would relocate to lizette for cost reasons, the chief policy analysis specialist of the deed leung bank, and the head of the northern region research department, wei dong, told the securities times correspondent, and some companies moved to the wider lizard region for claims requiring larger office space because of the low vacancy rate in the financial street and the limited space available for leasing, which limited the need for expansion。
“in recent years, the opening of business projects and the opening of metro lines have led to a stronger business climate in the rizé region, along with its geographical advantages and low rents, which has made it a relatively high-priced business circle, and this is why some enterprises consider rizé.” wei dong said to the times of securities。
The rent is expected to be stable in the second half
With regard to the current market situation, lee, in an interview with the securities times journalist, stated that the vacancy rate in the entire writing building had been rising over the past year, that rental demand had been depressed and that overall market underage had increased; and that, through the direct or indirect reduction of rents, there had been a high level of bargaining space throughout the past year, with many owners making concessions on rents, which had continued to occur for at least the first half of the year. Because of the relatively limited market demand and the increasing competition between writing buildings and neighbouring business circles for customers, the most immediate means of addressing the problem of empty space by defusing the pressure on owners is to target client resources with rent reductions。
Wei dong also indicated to the securities times journalist that the market for the beijing writing building was still in a flooring phase and that, according to data from the fourth quarter of 2023, the rent for the beijing a-writing building had fallen to 297. 9 yuan/m2/month, a decrease of 7. 3 per cent over the same period. Overall, the main reason for the substantial rent reduction continues to be the expected reduction of owners due to weak market demand and the desire to absorb their vacant space through price swaps。
“since the beginning of this year, we have clearly felt the warmth of the market, and there has been a marked increase in the number of businesses looking at housing, including large demand. But it will take time for this demand to reach the market, and feedback from owners on market demand is behind demand.” wei tung said。
Miyang, head of the research department of the north china region, also said that after the spring festival, the dynamism of the rental market for beijing writing buildings had recovered, with the cbd and east changan street regions most active. According to the current transaction data, between 500 and 2000 square metres represent about 70 per cent of the total, of which between 1,000 and 2000 square metres represent an increase before comparison. More direct price reduction strategies by owners have been effective in stimulating potential tenants, and there has been a significant increase in the number of recent house visits and queries and in comparison with previous years。
Looking to the post-market, miyang believes that the current empty pressure on some of the office buildings projects continues, that the need to attract a large number of clients will lead to effective backfilling and that only clear cost savings are expected to stimulate large demand. Thanks to macroeconomic policy regulation and a gradual improvement in overall market sentiment, market demand for the beijing writing building is expected to pick up steadily by mid-2024, but it will take time before the rents return to the rise。
Li, for his part, was more cautious about the beijing building market in 2024, and he believed that there would be some recovery trend, but that it would not be too much to look forward to or remain calm and objective. From a demand-side perspective, the relatively low demand from foreign clients, internet firms, etc., has now brought to the fore the need for rents for zong’s companies, which can truly unleash a large amount of demand at this low stage, largely as a result of the expansion of zong’s firms。
However, wei dong expects that the demand for the beijing writing building market will increase more significantly than last year, while only about 440,000 square metres of additional supplies are expected to be put on the market throughout this year, only 63 per cent of the average for the last decade, and smaller supplies will also effectively reduce market rental pressures. As a result, rents are expected to continue to decline in the first half of the year, with demand falling, the mindset of the owners stabilizing, and rents expected to rise steadily or even slightly。
Sun zouxian further noted that the supply of this writing building ended and markets entered the stock age, both on the supply side and on the demand side. Both tenants and owners need to shift their leasing policies: for tenants, the increase in the share of stock selection means that the cost structure is more complex, and enterprises need to balance the refurbishment replacement costs specific to the site-based stock industry, increased energy costs due to the age of the building, and the cost of facility depletion against rental costs in order to obtain optimal housing solutions; for owners, on the one hand, there is a need to exploit opportunities for the integration of tenants from the stock market and, on the other hand, demand increases from emerging strategic industries that have emerged in the context of china's economic innovation. Under the switch, market opportunities coexist with challenges。
