News release

Beijing’s Grade A office market rose for the first time in three years; diversified property sectors continued to attract investors

According to JLL Beijing’s 1Q22 Property Market Review

April 07, 2022

Kyrah Cheng

Head of Marketing, North China
+86 10 5922 1385

Andrey Yang

+86 (10) 5922 1382

Beijing: 7 April 2022 – “In the first quarter of 2022, Beijing’s commercial real estate market saw a significant recovery as the active leasing demand continued from last year. The strong resilience of Beijing’s market has greatly boosted market confidence,” said Julien Zhang, China Chief Strategy Officer and Managing Director for North China, JLL.

In the Grade A Office market, overall rent increased for the first time in the past three years while leasing demand remained active. Beijing’s investment market saw more intense competition for high-quality properties with a market focus on logistics, rental apartments and alternative assets. Overall rent in the prime retail market stayed stable. Dong’an Market re-entered the market after a renovation in this quarter. In the industrial market, rents continued to rise steadily with a growing demand for cold-chain storage. The high-end residential market has a booming demand and supply with transaction volumes reaching the highest quarterly level since 2013.

Grade A Office
Office 1Q22
Vacancy 10.2%
New Supply 0 sqm
Rental Growth 1.2% q-o-q

In 1Q22, the rent growth of Beijing office market turned positive after 12 consecutive quarters of declines. The Beijing office market saw continuous strong demand in 1Q22. The total net absorption reached nearly 157,000 sqm − double the level of total net absorption for full-year 2020. Sizable demands of over 8,000 sqm made considerable contributions to market transactions, accounting for more than 55% of the total transaction volume. The expansion demand from notable financial tenants significantly supported the leasing activities in the quarter, with a domestic finance company expanding by a considerable 30,000 sqm in the emerging Lize area. Domestic demand from TMT and healthcare firms also supported the leasing market.

In 1Q22, the overall vacancy rate of Beijing office market slid to 10.2%, recording the lowest vacancy level in the last ten quarters. Lize submarket reported 7.5 percentage points – the greatest q-o-q decrease in vacancy rate in the quarter. Overall rents reached a turning point in 1Q22, as the growth rate turned to positive, up 1.2% q-o-q but still slightly down 0.3% y-o-y. The rents of nine submarkets across the city maintained stable or reported positive rent growth, with Lize recording the greatest q-o-q growth at 7.5%. “The recovery in the Grade A office market proceeds in 2022,” said Michael Zhang, Director of Office Leasing for JLL Beijing. “Overall rents are predicted to rise by 6.7% for full-year 2022. As overall rents continue to rebound, the demand momentum since 2021 might slow down.”


Diversified property sectors have received much attention with logistics, rental apartments, and alternative assets being the investment focus across the country. According to data and analysis published in JLL’s Investor Sentiment Barometer 2022, 90% of respondents plan to increase investments in logistics, while 70% of investors state they will increase investments in rental apartments. In the Beijing investment market, rental apartments continue to attract much attention. In this quarter, Funlive and KKR have officially completed the acquisition of the Daxing Funlive apartment at a price of RMB 1.87 billion.

With the strong rebound of the office leasing market, office properties remain a hot sector. In this quarter, Hitone Capital completed the acquisition of No. 158 Beiyuan Road (originally known as Jiahe Supermarket) in the Olympic area. Hitone Capital plans to transform it into office use. Investment opportunities for high-quality properties in Beijing continue to be rare, but investors remain highly interested in the Beijing market. “Logistics, rental apartments and alternative assets are the major focus for investors at this moment,” said Jessie Xu, Operations Director, China and Head of Capital Markets, North China, JLL. “The accelerated development of life sciences and intelligent manufacturing industries promoted the continuous market interest in the business parks.”

Prime Retail
Office 1Q22
Vacancy 5.4%
New Supply* 11,000 sqm
Rental Growth 0.3% q-o-q

Note: Prime Retail refers to the Urban market. *New Supply is inclusive of the Suburban market.

Gastropubs performed actively, expanding after receiving investments. Popular gastropub chain, Commune raised hundreds of millions RMB in January, and opened its third location in Beijing at Taikoo Li South with plans for 120-130 stores nationwide for 2022. Focusing on nightlife, gastropubs increase shopping mall sales by extending operation hours and drawing customers with higher spending power. Domestic gold jewellery showed strong performance after reporting robust sales growth, accounting for over 8% of total opened stores in the quarter. For example, Laomiao Gold opened four new stores in the quarter. Landlords showed growing interest in domestic gold jewellery brands as they have higher rent affordability and improve overall positioning of first floors.

Urban rents remained largely stable; many landlords failed to raise rents in 1Q22 as previously planned. As retail sales growth and demand recovery were both below expectations, many regional malls found it difficult to raise rents. As a result, Urban rent growth remained flat at 0.3% q-o-q. Meanwhile, Core rent growth increased by 0.6% q-o-q, driven by top destination malls. Due to resurgence of Covid cases in the Suburban market, some suburban projects witnessed further closures and withdrawals, mainly from F&B and children’s entertainment retailers. Suburban vacancy level slightly increased to 6.5%, while Suburban rent recorded -0.4% growth in the quarter.

Dong’An Market, the 11,000 sqm store operated by Luxeporium, reopened as a handmade-fashion store, featuring nearly 600 brands, including 10 collection area for niche fashion brands and 39 premium brands. “With higher positioning, the renovated Dong’An market targets local customers rather than tourists. Also, the North of Wangfujing Street station on the Subway Line 8, which came online late last year, is expected to bring more local customers to Wangfujing precinct,” said Ji Ming, Research Director for JLL Beijing. “The renovated Dong’An Market added a new retail style to Wangfujing Street. The project is expected to improve the overall image and positioning of Wangfujing precinct, and improve the overall vitality of the precinct.”

Industrial 1Q22
Vacancy 4.3%
New Supply 0 sqm
Rental Growth 0.7% q-o-q

Subsidy policies for cold chain storage continue to be introduced, and the demand from the e-commerce and pharmaceutical industries continues to increase. In terms of market demand absorption, the transaction volume of upgrading warehouse units to cold-chain facilities continues to increase. Meanwhile, short-term leasing activities decreased temporarily due to the Lunar New Year, a fall in demand for production and online sales and a decline in demand from enterprises replenishing their inventories. Regardless, long-term leasing activities remained active, which drove down the overall vacancy to 4.3%, mainly supported by logistics players.

Rent of Beijing industrial market remained stable at 0.7% q-o-q growth in 1Q22. The majority of projects continued to show stable rent growth, and nearly all fully occupied projects contributed to the conditions for rent increases across the market. “The postponement of new supply has helped keep moderate pressure on for gradual but slight rent increases,” said Mi Yang, Head of Research for JLL North China. “Some projects affected by the strict acceptance and tax contribution standards of the Beijing government may continue to be postponed. A potential supply peak this year is not expected to put significant pressure on the vacancy rate. Thus, the vacancy rate is expected to maintain at a healthy level of 6% with the support of strong demand from logistics and e-commerce industries.”

High-end Residential
Residential 1Q22
Luxury Apartments
New Supply 2,667 units
Capital Values Growth -0.4% q-o-q
Rental Growth 0% q-o-q
High-end Villas
New Supply 0 units
Capital Values Growth -3.6% q-o-q
Rental Growth 0% q-o-q

Luxury apartment sales hit quarterly high, unsurpassed since 2013, while new supply continues to remain at high level. Luxury apartment sales have slightly dropped compared to 4Q21, largely because developers launched a series of discounts last quarter to meet annual sales target. First quarter is traditionally off-season in primary market. However, a total of 848 luxury apartment units were sold, down 45.0% q-o-q but up 80.0% y-o-y; a quarterly high unachieved since 2013. Luxury apartment supply continued to remain strong and stable in the quarter as developers finished laying out annual sales strategies and started to launch new units. It achieved the highest first quarter number ever recorded.

High-end housing prices and rents remained largely stable, while strong demand for favorable projects set to continue. Monetary easing continues to provide strong positive signals to the residential market, further strengthening market sentiment. Sales are predicted to remain at a healthy level for high-end projects in prime locations. Sales prices will continue to be stable with sizeable demand. “High-end residential units continue to be scarce due to a lack of high-end lands and a tight control on premium rates,” said Mi Yang, Head of Research for JLL North China. “The drop in the number of land transactions in 2H21 may slow down the high-end supply later this year.”

About JLL

JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $19.4 billion, operations in over 80 countries and a global workforce of more than 98,000 as of December 31, 2021. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit