March 30, 2023
BEIJING – As China pushes its economic recovery forward and exercises policies to help enterprises overcome difficulties to good effect, businesses sentiment will gradually improve with stronger demand for commercial real estate market, industry analysts said.
Given the market performance in the first quarter, the implications of COVID-19 has basically faded away in China, and the willingness of businesses to expand will gradually increase, said Lu Ming, director of Research Department for North China at global real estate firm Colliers.
As the macro economy and corporates’ financial statements continue to turn for the better, enterprises will boast stronger demand for office space, which is conducive to a higher conversion rate for transaction, he said.
However, it takes time for these policy measures to deliver on the ground and for enterprises to adjust their expectations, said Yan Quhai, managing director of Colliers in North China, adding that it also takes time for the market to shore up confidence and build up actual demand.
The vacancy rate of Grade A offices in Beijing rose 0.9 percentage points to 16.9 percent as of the end of the first quarter this year, while monthly rent slipped 0.7 percentage points to 328.8 yuan ($47.7) per square meter, according to data from Colliers.
Lu noted that the market will expect notable improvement in the second half of this year. The market performance on the demand-side will likely witness a moderate structural recovery for the whole year.