APPD Market Report Article

Beijing

December 1, 2021

3.8%

RMB 1.7

Growth
Slowing

Market stable; interest in cold chain storage demand remains

  • Leasing inquiries from the usual demand sources were active in the quarter as demand recovery continued to progress and the market remained stable. Landlords were still interested in strategies to accommodate tenants looking for cold chain storage.
  • Many landlords had limited or less preferable space available for lease in the quarter, making it difficult for some to satisfy various requirements from tenants. For example, some large space or ground-floor requests were unfilled in the quarter.

Overall vacancy retreats back to just below 5%

  • No new projects entered the market in the quarter. One project was postponed and is expected to open by year-end, pending further delays.
  • The overall vacancy rate dipped back down to 4.9% in the quarter, after a number of landlords filled much of their remaining vacant spaces. Resting under the 5%-mark once again, the figure indicated that vacancy was at a low and healthy level.

Rents continue to see modest growth

  • Overall rent growth remained slow, but continued to record positive gains; market rents grew 0.8% q-o-q. Landlords with very stable projects used new leases to push for slight gains where possible.
  • Metcold acquired 29,000 sqm in Shunyi in the quarter. The domestic logistics developer announced plans to incorporate smart kitchens and temperature-controlled systems on site, in a bid to target fresh food e-commerce tenants.

Outlook: Year-end vacancy to hold steady; rents to maintain trend

  • Despite more than 300,000 sqm of supply expected by year-end, the overall vacancy rate is expected to see only a slight increase as most projects are not reported to have significant space available for lease. Overall rents are projected to maintain their modest growth trend.
  • As policy continues to promote overall industry digitisation, additional support to foster such development is expected to encourage more landlords to upgrade and future-proof their assets. This is further projected to place more emphasis on developing the higher-end sectors such as advanced manufacturing, technology, and healthcare.

Note: Beijing Logistics & Industrial refers to Beijing's prime non-bonded logistics market.

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