Beijing Office Property Market Research & Forecast Report 2Q13

In Beijing, several economic indicators highlighted a lack of demand and demonstrated the challenges to recovery during 2Q13. According to Beijing Statistics Bureau, the citya��s Producer Price Index for Industrial Products (PPI) recorded a 13th consecutive month of decline in May 2013, decreasing by 3.1% y-o-y. Beijinga��s Fixed Asset Investment (FAI) growth was 7.3% y-o-y during the period of January to May 2013, a deceleration of 2.9 percentage points from the same period of 2012. Consistent with the economic indicators, demand for Beijinga��s office properties was slack in 2Q13, with a notably smaller amount of enquiries and leasing transactions compared to 2Q12. Given the tightened corporate leasing budgets and subdued confidence in the economy, some corporations retreated from Grade A office properties, leading the vacancy rate of the Grade A office property market to edge up. Correspondingly, the average net effective rent of the market declined moderately q-o-q in 2Q13. By contrast, the investment market was very active, with several en-bloc transactions concluding during this quarter.


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