In fact, a real estate advisory giant report shows that the average price of renting offices in the Chinese capital grew by as much as 70 per cent year over year in the 12-month period.
Beijing was rated fifth on C&W’s list of the world’s most expensive places to rent office space, behind Moscow, Tokyo, the West End of London, and Hong Kong, which retained its place at the top of the pile. Interestingly, Beijing leap-frogged New York in this context last year.
Overall office rates globally increased by 3 per cent during 2011, a notably stronger growth rate than the 1 per cent recorded for the previous year. Taking each region individually, Asia-Pacific saw its office rents rise on average more quickly than any other part of the world.
Beijing’s striking rental growth rate was attributed to a persistent lack of high-quality office supply coupled with increasing demand among international operators. Other Asian locations with sharply rising office prices included Shanghai and Singapore, where average rents increased by 27 per cent and 24 per cent, respectively, in 2011.
Demand for offices in Hong Kong remained high last year, but the effects of the euro-zone financial crisis held back expansion among banking groups, and rent rises could not keep pace with those seen in several other Chinese cities.
“The unprecedented urbanisation process in China and strong economic growth will continue to drive up the demand for office space,” said Andy Zhang, managing director of C&W China.
“With a single-digit record low vacancy rate and not much quality supply foreseeable in the coming years, we expect Beijing and Shanghai to maintain the landlords’ market position in 2012, but the rental growth will slow down.”
Looking at the market for offices in Europe, C&W picked out London, Moscow, Frankfurt, Munich, Paris, and Stockholm as cities set to defy the testing economic headwinds forecast for at least the next few years.
Editor’s notes: In 2022, JLL’s Premium Office Rent Tracker ranked Beijing’s Finance Street district as the 4th most expensive place in the world to rent office space with a gross effective rent equivalent to USD 167 per square foot per annum.