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A
glut of newly completed office space in Beijing is likely to result in a
further rental decline this year, according to Colliers International.
The property consultant said more than 1.36
million square metres of grade-A office space is expected to be completed
this year in the capital city, adding pressure to the office stock and
forcing rentals to decline this year.
In its latest research report, Colliers said the new supply of grade-A
office space would affect most of the major districts, with total stock
forecast to increase by 39 per cent and 33 per cent in Dongcheng and Xicheng,
respectively. Supply will rise 34 per cent in Chaoyang and 225 per cent in
Haidian district.
 
The general manager of Colliers in Beijing, said
many office projects under construction were postponed last year and so were
not released on to the market.
"This year we will see the threat of a great
deal of surplus supply," she said. "Even with some developers
looking to adjust their releases into the market, this will not entirely
relieve the market from the supply pressure."
Colliers expected grade-A rentals to fall another
10 per cent or so in the next 12 months.
At the end of last year, the average asking
monthly rental for grade-A office space was US$25.81 per square metre.
Compared with the same period in 2002, average rentals have dropped 6.4 per
cent.
Colliers said the adjustment would provide
opportunities for organisations looking to set up or expand their offices in
Beijing, or those intending to relocate.
- By Peggy Sito
South China
Morning Post 4 Feb 2004
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