According to a recently published report from real estate consultancy Jones Lang LaSalle, rents for Grade A office space in Beijing rose to RMB 293 per sqm per month during the fourth quarter of 2011, an increase of 9.1 percent compared to the third quarter and 41.4 percent compared to the same period in 2011.
However, the study also pointed out that the growth rate in commercial office rentals in China’s capital city was showing signs of slackening compared to earlier in 2011. Still, by the end of the year, Jones Lang saw vacancy rates in Beijing at only 9.1 percent, and contractual vacancy rates were even lower at 5.5 percent.
The interesting point to consider is the wide variation between Jones Lang’s numbers and the findings of an essentially parallel report from Cushman and Wakefield which we reported on in Mingtiandi a few weeks back. Where Jones Lang saw annual growth in grade A office rents of 41.4 percent, Cushman concluded that for grade A space in Beijing, the average rentals in the fourth quarter were at RMB 507 per sqm per month – an increase of 73 percent over the same period of 2010. The table below outlines some of the differences between the reports from the two agencies.
All figures are for Grade A office | Jones Lang |
Cushman and Wakefield |
Average rental prices (in RMB/sqm/month) |  293 | 507 |
Annual increase in rental rates | 41.40% | 73.00% |
Vacancy rates | 5.50% | 2.70% |
What’s amazing to me is that these two agencies are supposed to be looking at the same city. Perhaps there are some differences in definition of Grade A space that might explain the disparities between these findings, but the reports do not specify how the analysts classified the data they were studying or how they collected their sample.
We will look at this again in the next couple of weeks when I have a chance to compare the findings and predictions of all of the major agencies in China. Right now we are still waiting for a few stragglers to publish their 2011 4Q data. When we have a complete set collected on RightSite then we will publish a comparison of the agencies findings here on Mingtiandi to share with all of you.
In the meantime, we now have 2011 fourth quarter reports from Cushman, CBRE, Knight Frank and Colliers published on RightSite, and you can download them from our research report centre. Â Free research reports — guaranteed to be worth what you paid for them.
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