Demand for offices in Beijing declined due to the novel coronavirus disease (COVID-19), but market players are optimistic about the future because of new growth drivers, according to a report released by a real estate and investment management firm on August 27.
By the end of June, the overall vacancy of Class A office market increased to 14.0 percent, recording its highest level since 2010. And the average monthly office rents plunged by 6.8 percent to 356 yuan ($52) per square meter, marking a five-year low, according to a report by JLL.
"We anticipate the Beijing office market to be well on the road to recovery as early as the end of 2021, fueled by increasing demand from emerging industries, such as technology, healthcare, and finance," Julien Zhang, Managing Director with JLL North China, said.
According to a JLL survey, given the resilient momentum of the technology sector during the epidemic and strong policy support, 90 percent of the respondents agreed that companies in fields such as artificial intelligence, cloud computing, 5G, new infrastructure, online gaming, and livestreaming will be crucial to the recovery of Beijing office market as these companies further grow and expand.
Meanwhile, COVID-19 has brought major development opportunities for healthcare and insurance industries. Driven by the China International Fair for Trade in Services and the opening up of Beijing's financial services industry, robust growth in demand from professional and financial services industries will continue. These industries are expected to become bright spots for future growth in the Beijing office market.
Copyedited by Madhusudan Chaubey
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