News release

Flexible pricing strategies stimulate demand in Beijing office market

According to JLL Beijing’s Q1 2024 Property Market Review

April 09, 2024

Kyrah Cheng

Head of Marketing, North China
+86 137 1606 7092

Beijing: 9 April, 2024 – “Benefiting from a series of growth-stabilising policies, the demand for office leasing market has increased thanks to effective low-price strategies. Meanwhile, the retail leasing market continues to receive positive signals from the ongoing consumption recovery,” stated Rayman Zhang, Managing Director for North China, JLL.

The Grade A office market experienced a surge in leasing activity despite rental rates declining across the city. The investment market witnessed a resurgence of investment-oriented buyers while retail properties remained popular for investment. Urban renewal initiatives have introduced new projects to the prime retail market, effectively stimulating leasing demand by recovering offline consumption. In the industrial market, vacancy rates maintained a slight upward trend in the first quarter. Consequently, project owners responded by increasing rental concessions to attract tenants. The high-end residential market was impacted by supply shortfalls, resulting in a significant decline in transaction volumes during the first quarter.

Grade A office 

Office Q1 2024
Vacancy 11.7%
New Supply 0 sqm
Rental Growth -4.6% q-o-q

Overall rents continued to decline citywide, which in turn stimulated the heightened leasing activities. Recent rent reductions have led to a rise in market inquiries in 1Q24. Landlords and tenants continued to engage in intense negotiations, but the average negotiation period was significantly shortened. The finance and TMT sectors were the main drivers of leasing demand, with TMT tenants contributing nearly half of the Grade A leasing volume. Notably, several leasing transactions between 3,000 and 5,000 sqm from TMT subsectors were tracked in Zhongguancun and the Olympics Area.

The overall vacancy rate dipped slightly to 11.7%, down 0.1 percentage points. The Grade A net absorption recorded 7,800 sqm, partially offset by more than 30,000 sqm negative take-ups from Finance Street and Wangjing. Landlords in the two submarkets continued to face vacancy pressure due to local anchor tenants vacating space and weak leasing demand hindering backfilling efforts. Grade A rents declined by 4.6% q-o-q and 11.4% y-o-y. Landlords have realised the effectiveness of direct rent reductions in closing deals. As a result, landlords with the authority to directly adjust rents have made significant changes to pursue space backfilling. “Grade A office rents are expected to decline by 7.8% in 2024,” said Michael Zhang, Senior Director of Office Leasing Advisory for JLL Beijing. “With fierce price competition anticipated to attract the limited leasing demand, we expect rents of high-quality office space to decrease and converge towards buildings’ bottom-line costs, including operating costs and financial interest.” Despite this, the decline in rent has significantly reduced the operating costs for end users such as tenants, which has also brought more opportunities for companies to relocate, consolidate, and upgrade their office space.


Quality core asset projects have been released for sale as market activity has steadily increased. The year 2024 kicked off with AIA Life Insurance’s first direct investment in a real estate project in Beijing, acquiring a 95% stake in the Capital Square project held by CapitaLand Investments. The total transaction amount recorded was nearly RMB 2.4 billion. Capital Square is an office building with a ground floor GFA of 44,800 square metres. CapitaLand secured this property through an online auction platform in 2022 and has since undertaken comprehensive asset upgrades and renovations to enhance its value.

The securitisation of consumer infrastructure continues to drive fervent interest in retail property investments. This trend is further bolstered by proactive policies that facilitate the introduction of consumer infrastructure REIT products, significantly amplifying the appeal of retail property assets within the investment market. Notably, domestic investors remain at the forefront, establishing their dominance in the sector. Jessie Xu, Operations Director of China and Head of Capital Markets North China, JLL, stated, “As we head into 2024, we have observed an upswing in the willingness to divest prime assets in core areas. This increasing disposition, coupled with the expanded scope for negotiation, will further strengthen the stability of the Beijing investment market."

Prime Retail

Retail Q1 2024
Vacancy 5.2%
New Supply* 383,000 sqm
Rental Growth 1.3% q-o-q

Note: Prime Retail refers to the Urban market. *New Supply includes the Suburban market.

Improvement in market sentiment drives demand surge. The robust consumption rebound has led to a steady recovery in leasing demand, with the absorption figure exceeding levels from the past two years. New projects that entered the market by 2023 with low opening rates have benefitted the most from this demand boom. Vacancy rate from most projects were decreased to below 10%, highlighting their quick absorption capacity. Moreover, the increased store openings of new brand in various sectors including F&B, fashion, lifestyle and NEV entering the market, indicating market confidence and a positive expansion trend.

Vacancy rates return to pre-COVID levels. During the quarter, three projects totalling 183,000 sqm were launched in the Urban market, while one project of 200,000 sqm opened in the Suburban market. Despite the robust market demand, the substantial scale of the supply wave and retailers’ hesitancy to open stores in unproven new projects have created challenges for full occupancy. However, the sizeable destocking of existing vacancies across the city has alleviated the vacancy pressure posed by new supply. The overall vacancy rate returned to pre-COVID levels, with the Urban vacancy decreasing by 0.7 ppts to 5.2%, and the Suburban market dropping by 0.3 ppts to 6.4%.

Rent recovery accelerates with the highest quarterly growth rate since 2019. Most landlords adjusted rents to align with their higher revenue targets for 2024 compared to 2023. Additionally, newly opened projects in 2023, which initially had lower rent bases, have stabilised their operations in the first quarter and are now undergoing rent recovery. In the Urban market, rents rose by 1.3% q-o-q. In the Suburban market, rent growth surged by 2.8%, rebounding to the 2021 level for the first time. However, rents across the city are still a long way from pre-COVID levels. “The demand surge is expected to continue throughout the year. Increased leasing activity enables landlords to upgrade their tenant mix by selecting higher-positioned brands from active inquiries. As these tenants typically process strong affordability, it is anticipated that overall rent levels will adjust higher after their leasing deals are finalised.” said Ji Ming, Research Director for JLL North China.


Industrial Q1 2024
Vacancy 10.5%
New Supply 0 sqm
Rental Growth -0.9% q-o-q

Demand was temporarily held by current market conditions in Q1 2024. Due to the Chinese New Year holiday, coupled with the negative impact of cautious market sentiment, the transaction volume saw a notable decline compared to Q4 2023. The main demand driver in Q1 2024 was cost-control relocations and upgrades at lower prices. Emerging areas, such as the BDIA district, were relatively active, recording 9,000 sqm in deals. This quarter, no new supply entered the market as some scheduled completions were postponed until the next quarter. As a result, the overall vacancy rate rose 0.1 ppts to 10.5% in Q1 2024.

Overall rents decreased slightly by 0.9% q-o-q in Q1 2024. As the downward trend in leasing costs continued, some landlords became more flexible and provided rent concessions or longer rent-free periods to attract tenants. The Daxing submarket recorded the highest downward rental adjustment amongst all submarkets in Q1 2024. Due to the competition from BDIA district and Langfang, landlords of ageing warehouses and projects with high vacancies in the Daxing submarket further lowered rents to attract and retain tenants in Q1 2024.

“Rental declines expected to widen as market pressures mount,” said Mi Yang, Head of Research for JLL North China. “Since the completion dates of some future supply have been postponed to the 2Q24, six new projects with a total GFA of about 370,000 sqm will enter the market in the next quarter. Overall rents will likely drop further in the next several quarters due to supply pressure and temporary soft demand. However, we expect the low-rent environment at the start of the year to encourage tenants to upgrade and further boost leasing activities in 2024.”

High-end Residential

Luxury Apartments Q1 2024
New Supply 765 units
Capital Values Growth 0.7% q-o-q
Rental Growth 0.3% q-o-q

Both demand and supply decline in the luxury apartment market. A total of 616 luxury apartment units were sold in the quarter, down 59.2% q-o-q and 55.5% y-o-y. Developers held off new launches due to the Chinese New Year holiday, coupled with softer market conditions. New supply decreased by 16.2% q-o-q, suppressing sales volume. High-priced new projects drove up luxury apartment prices by 0.7% q-o-q. As supply in the secondary market increased again, secondary prices continued to decline. On the other hand, leasing activity showed signs of recovery driven by the post-holiday return to work. Active demand in core areas resulted in a slight 0.3% q-o-q rent increase.

While easing policies are gradually introduced, demand becomes more rational after the short-term increase. In February, Beijing adjusted its housing purchase restriction policy in the Tongzhou district, further strengthening market recovery expectations. “The market still needs time to recover and calls for more policy measures to boost confidence and stimulate demand,” said Mi Yang, Head of Research for JLL North China. “The gradual recovery of market confidence is expected to stimulate onlookers to enter the market and promote stable high-end sales, driving prices to increase slightly, while the price divergences among secondary apartments are expected to widen.”

About JLL

For over 200 years, JLL (NYSE: JLL), a leading global commercial real estate and investment management company, has helped clients buy, build, occupy, manage and invest in a variety of commercial, industrial, hotel, residential and retail properties. A Fortune 500® company with annual revenue of $20.8 billion and operations in over 80 countries around the world, our more than 106,000 employees bring the power of a global platform combined with local expertise. Driven by our purpose to shape the future of real estate for a better world, we help our clients, people and communities SEE A BRIGHTER WAYSM. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit