Photo by Zun Lixuan of China
Huaxia Times (chinatimes.net.cn) reporter Li Future trainee reporter Li Kaixuan reports from Beijing
“Except for a few landmark office buildings in this period, office rents are going down.” Chen Bin (pseudonym), who is engaged in office leasing, told Huaxia The Times reporter described in his eyes the current state of the Beijing office market.”Black Swan” suddenly came, almost all industries were spared, and the fate of the office building was closely linked to the operation of the enterprise.
From the data point of view, Beijing’s office market has experienced a high vacancy rate in 2019, and the rent war between office buildings has not failed. In 2020, Beijing’s office market will usher in a peak supply, and the entry of many large-volume office buildings may further increase the vacancy rate. There are voices in the market that the epidemic has accelerated the elimination of the industry, many companies have exposed their shortcomings and then withdrew from the market. Office buildings are facing this”wolf more meat less” situation, and the”hunger game” has begun.
A few rents are firm and most are down
The”China Top Ten Contemporary Buildings” China Zun is already hiring, it is a skyscraper on the Z15 plot in Beijing The building has a total height of 528 meters, 108 floors above ground and 7 floors underground, with a total construction area of 437,000 square meters, which can accommodate 12,000 people at the same time.
Before China Zun had not yet entered the stage of leasing, Chen Bin had estimated the rent price of”China Times” reporters,”not less than 27 yuan/square meter/day”. At that time, the rental prices of SK Building, Intime Center, IFC Building, and Emperor Building in the same area were about 15-20 yuan.
“Right now, the rent of China Zun is less than 30 yuan/square meter/day. It is a landmark building with a good location. Including the third phase of the international trade, basically the rent has not dropped much, and the price is 33 yuan/square meter./Day, the transaction price is about 28 yuan/square meter/day.”Chen Bin said,” This is one of the few office buildings in Beijing where rents have not fallen.”
In terms of occupancy rate, Chen Bin told reporters that China Zun is mainly digested internally, other leases are not much. The occupancy rate of the third phase of Guomao is very high, and there are not many vacancies.
In response to China Zun ’s rent situation, a reporter from China Times called China Zun ’s investment promotion center as a customer.”The lower floor is almost 21 yuan/square meter/day. Only the lower floor is considered for small and medium-area sub-leasing. High-rise cannot be sub-leased. The rent for 60 floors or above is about 28 yuan/square meter/day, less than 30 yuan.” China Zun Investment Center The staff told the reporter of China Times.
China Zun and Guomao Phase III are almost two of the strongest prices in the Beijing office market. The excellent location has brought a steady stream of large enterprises to both projects.”IFC Building, Emperor Building, and PICC Building are also very high-end office buildings. The transaction prices are now lower than before, and are expected to be around 10-14 yuan/square meter/day.” Chen Bin told the China Times reporter.
“High-end office buildings with non-landmarks that are more affected by the epidemic in rents have more CBD areas. For example, those high-end office buildings along the Chang’an Street have their rents reduced.” Chen Bin told””Huaxia Times” reporter said. The reality is that since 2019, Beijing’s office market has experienced a decline in rents.
Data released by Dade Lianghang show that in the fourth quarter of 2019, the effective net rents of Beijing and the five core business districts were 382.4 yuan/square meter/month and 427.9 yuan/square meter/month. If calculated in”days”, these two values are about 12.3 yuan/square meter/day and 13.8 yuan/square meter/day.
From the perspective of the International Trade Area, after reviewing 47 office buildings, the China Times Times reporter found that if the developer or the owner’s actual quotes prevail, the office buildings can reach 13.8 yuan/square meter/day. There are 22 seats. Based on the estimated transaction price, only nine office buildings can reach this price.
High supply and high vacancy problems
Another problem facing the Beijing office market is high supply. According to data released by Colliers International, from 2002 to 2020, the growth scale of Beijing’s Grade A office market has gone through three periods:the supply-driven period from 2002 to 2008, and the rental-driven period from 2009 to 2017. The second supply boost period from 2018 to 2020.
From the previously hot joint office to the large office building that constantly refreshed the building record, many companies have begun to explore”office space”. But the data shows that the stock is already in a “difficult to digest” state. Data show that as of the fourth quarter of 2019, the total stock of Grade A office buildings in Beijing has climbed to 11.14 million square meters.
Colli International pointed out that the peak of supply continues to drive up the vacancy rate is the essence of the market.”Regardless of the epidemic, the vacancy rate that is gradually increasing is the current status of the Beijing Grade A office market.” Data show that in the fourth quarter of 2019, the vacancy rates of office buildings in Beijing and the five core business districts reached 13.5% and 7.6%. .
“Now there are very few companies renting office buildings, and there are also very powerful companies that rent, basically the ones that are very stable in terms of finance. But what must be said is that from our agency Judging from the outbreak, there has been very little business.”Chen Bin told the China Times reporter.
Colli International pointed out that 2020 will be the last supply peak of Beijing office buildings in the next 4 to 5 years. Beginning in 2021, the overall market will enter a cycle of 3-4 years of market depletion with the end of the second round of supply peaks. The overall income of the Grade A office market will continue to increase, but the probability of rent adjustment is high. It will continue until the end of 2020, and rent stabilization is expected to increase from the beginning of 2021.
For dehua, Chen Bin said,”The fate of office buildings is linked to each industry and the companies in each industry. If this industry is not good or the current economic environment is bad, How should office buildings be decommissioned?”Chen Bin told a China Times reporter from the perspective of market participants that the epidemic coupled with high stocks had forced office buildings to start a price war.” This is why when renting office buildings, the other party will Saying ‘this is just a quote’ means that there is room for bargaining. ‘
The epidemic changes the pace of the market
A recent report released by Colliers International shows that affected by the epidemic, social consumption demand and production activities are suppressed, and a large number of economic activities Are in a suspended state.”The impact of the epidemic on the office leasing market can be borrowed from the impact of SARS in 2003. However, our basic judgment is that the epidemic has no decisive impact on the overall market, and its impact is more a function of market participant activity and changes in market rhythm. That’s it.”Colliers International said in the report.
“The rent is indeed not particularly expensive. Before the epidemic did not arrive, I was totally able to bear it. But since the epidemic broke out, there were no customers for 3 months and I did not have a passenger income. Then I There must be no way to survive.”Wang Chi (pseudonym), who runs a” backroom escape”on Dawang Road, decided to close his store.
The rent is superimposed on electricity, internet, store maintenance and other expenses. Wang Chi, a small closet, needs nearly 17,000 yuan in operating costs per month. This is a survival sample of small self-employed people after the advent of the”black swan”. In addition, due to the instability of the global economy, it is difficult for many small and medium-sized enterprises to”overwinter”, and a wave of layoffs has begun to emerge.
“After the outbreak, our business has also stagnated. Companies have become very cautious about renting office buildings and have strict control over costs. In the past two years, there were many, many financial companies to sign contracts. Many of them are financial companies. They rarely consider the price when they are operating and expanding. They mainly depend on the location and floor decoration. Therefore, the price of office buildings has been speculated in the past few years. The Times reporter said.
Chen Bin said that after a wave of thunderstorms in industries such as P2P, many office buildings began to control the company’s qualifications. Colliers International believes that the new crown pneumonia epidemic is only a “scapegoat”, which has accelerated the demise of backward companies and more quickly exposed problems already existing in the business activities of some companies.
“First of all, companies with a state-owned background will be easier to enter China Zun. We have to strictly review the qualifications of the companies. Now basically all the customers who sign the contract are internal customers, such as CITIC Bank and Alibaba.” China The staff of the China Merchants Investment Center explained to Huaxia Times reporters the relevant conditions for leasing the office in China.
At the same time, affected by the epidemic, most companies use the online office model to maintain business operations, which has also changed the pattern of the office market to a certain extent.”In this large-scale remote office trend, we hope that office owners and tenants in China will reconsider this way of working and reorganize the layout of office buildings and workplace space. Owners may consider adding more shared office space And public areas into the office building.”Said Wei Chaoying, managing director of China’s corporate services department of DTZ.
Responsible editor:Zhang Bei Editor-in-chief:Zhang Yuning