Average rentals in Beijing's office market are expected to fall 15 percent to 20 percent in 2009, due to soaring supply and shrinking demand, said a Jones Lang LaSalle report yesterday.
The completion of 2.33 million sq m of new office buildings in Beijing will expand the market by 27 percent, further increasing the downward pressure on rental prices, according to the report.
"While the global economic downturn will see MNCs (multinational corporations) remain cautious on expansion, the government's massive stimulus packages and the opening up of more business markets to private enterprises will help drive demand from local companies in 2009," said Julien Zhang, managing director and head of markets at Jones Lang LaSalle's Beijing office.
Among Beijing's key office sub-markets, the Central Business District (CBD) recorded the sharpest drop in rentals, declining 6.2 percent in the fourth quarter of 2008 from the previous quarter. The addition of new space in 2009 is expected to spur even more intense competition among landlords, especially in the CBD.
(Chinadaily.com.cn January 14, 2009)
