MARKET OVERVIEW

Beijing office market showed clear signs of recovery and performed better than expected at the beginning of 2025. Landlords’ “price-for-volume” strategies have provided rental cuts, extended rent-free periods and customized fit-out and helped boost leasing activities. This approach has resulted in a further decline in average rents, serving as a great opportunity for tenants to negotiate for more favourable leasing terms or consider upgrading to higher-quality office space.

Beijing’s Grade A office market saw no new projects in Q1/2025 and the citywide Grade A office stock remained at 14.91 million sq m (including self-use areas). The citywide vacancy rate stood at a high level of 19.8% while the Grade A office rent fell by 5.2% QoQ to an average of RMB234 per sq m per month.

The Grade A office market had a decent performance with increasing deals. The majority of demand was driven by the IT sector, as well as the financial industry, leading to a modest decline in vacancy rates and an increase in activity across several submarkets. Other sectors, such as Manufacturing and Retail & Trade picked up stably, although their contributions to overall leasing demand remained limited. Notably, submarkets such as Zhongguancun and Lize continued to gain strong leasing momentum, showing tenants’ confidence and expansion activities.