Beijing’s CBD to get even more crowdedOctober 31, 2016 / By
At the core of Beijing’s central business district – commonly referred to as Guomao – construction on a vast superblock set to cover an area of 300,000 sqm is well underway. The dust will settle sometime in the mid-2020s, packing in another 17 office towers with more than 2 million sqm of newly constructed office space. It is expected to release some of Beijing’s pent-up office demand, but viewing this massive development in terms of new commuters to the area spells serious challenges for daily users of Guomao’s notoriously congested transport infrastructure.
After doubling from 2008 to 2016, the CBD office population is predicted to increase by at least another 50% by 2025, crossing the half-million mark by 2020. The diagram below shows the office worker population with the size of the icon representing the estimated number of office workers per building (or click here for a more detailed breakdown).
Beijing’s Future CBD Office Worker Population
Source: JLL Research
When the workday ends at 6 pm, Guomao metro station is a bottleneck as commuters queue to enter the station before squeezing onto trains. A maximum of 1,500 people can board each train per minute, meaning that less than half of the current CBD office population can leave the area by metro from 6-7 pm – or a third of the expected CBD office population in 2025.
Metro fares increased at end-2014, but achieved only half of the expected 10%-reduction in commuters during rush hour. Meanwhile, work has begun on ambitious plans to complete 12 new metro lines before 2020, even including a new line that will run directly alongside an existing route through Guomao. However, delays are possible, and it remains to be seen if this will be enough.
While plans for above-ground transport are limited, the severely clogged roads have prompted draft proposals for a congestion charge ranging from 20-50 RMB daily, following in the footsteps of London and Singapore. However, both cities were able to leverage unused capacity on their public transport systems at the time of adopting such a policy.
Guomao’s transport infrastructure is at capacity, yet the volume of commuters is predicted to rise by a third over the next four years. This will increase the appeal of living close to the office and could cause apartment rents in the CBD, already among the highest in Beijing, to rise further.
Heavy congestion on the roads in central areas also supports the argument for decentralisation. Recent quarters have seen several large foreign firms relocate from the CBD to emerging submarkets, which offer lower rents and comparatively stress-free commutes.
However, the strong business environment of the CBD is still crucial for many companies to function efficiently, and for them, relocation is not an option. Technology companies and venture capital firms in particular are leading the way in offering staggered working hours for employees. This is a start to spreading peak travel hours over a longer period of time.
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