Rents in Beijing's prime retail market post sustained growth

Rents in Beijing's prime retail sector have kept increasing for four consecutive quarters, but still lag behind compared to pre-pandemic level, recovering from a low base, said a latest report of real estate advisor JLL.

According to the report, leading projects have been adjusting their tenant mix and enhancing their market appeal in Beijing, which in turn have driven moderate rent increases, while the stabilization of recently opened projects with lower starting rents contributed to rent hikes.

All the above factors have registered continuous rent growth in Beijing's retail market by 0.9 percent in the urban rental market and 1.8 percent in the suburb, it noted.

Rayman Zhang, managing director for North China at JLL, said that since the beginning of this year, Beijing has sustained an economic recovery trend.

"The sustained efforts of policies are gradually showing results. Despite overall subdued office demand, the continuous adjustment of rents is expected to have a positive impact on the market activity in the second half of the year," Zhang said.

"Beijing's prime retail market has maintained a steady recovery, creating opportunities for tenant-mix adjustments," he added.

However, amid four consecutive months of growth, rent levels in each submarket across the city remain 15 percent below their pre-pandemic levels, suggesting the market is still in the early stages of a steady recovery.

In addition, the report said that the Grade A office market demand remained under pressure, with major tenants' relocations exacerbating vacancy pressure in certain submarkets.

In the investment market, real estate developers have accelerated the disposal of core assets, with domestic buyers as the absolute mainstay, it said.

chengyu@chinadaily.com.cn