Demand increases as Beijing Grade A office building vacancy rates slightly decline

21st Century Business Herald reporter Zhang Min

Recently, Colliers International released data showing that in the first quarter of 2026, the overall net absorption in Beijing’s Grade-A office market was about 57k square meters, with market demand increasing steadily and continuing the trend of ongoing de-leveraging; the vacancy rate fell by 0.6 percentage points quarter over quarter to 18.5%, and decreased by 1.7 percentage points year over year.

In terms of rents, the overall market’s average net effective rent reached 212.6 yuan per month per square meter, down 4.2% quarter over quarter and down 12.4% year over year; the “stable volume but falling prices” feature is evident.

Among them, the performance of sub-markets is clearly differentiated. In the first quarter of this year, the CBD sub-market’s net absorption remained negative, continuing the trend from the past three years in which vacant space has been steadily increasing.

After five years of continuous large-scale de-leveraging, the Lize sub-market recorded negative net absorption for the first time. According to Colliers International, from 2021 to 2025, the Lize sub-market’s average annual net absorption was 152k square meters, while the vacancy rate dropped sharply from 66% to 21.2% in the first quarter of this year. Since last year, as competition among cross-market segments has intensified further, the Lize sub-market has also begun to face competitive pressure. However, the agency said this is a benign adjustment.

In the same period, the net absorption of sub-markets such as Wangjing–Jiuxianqiao, Yansha, Aoyou, Financial Street, and the Dongcheng business district all increased to varying degrees.

Regarding changes in rents, Colliers International pointed out that, affected by cost pressure, companies are more inclined to move from core markets with high rents to outer areas of sub-markets with better value for money or to emerging projects, and high-quality Grade-A projects around core sub-markets are continuing to divert demand away from the core area. This has also led to sustained downside pressure on rents being transmitted throughout the market.

Colliers International noted that, as rents continue to undergo in-depth adjustment, landlords should not only pay attention to pressure from current inventory but also consider the risk of increased supply pressure over the next two or three years. In the future, the market may lean toward adopting more aggressive rental discount strategies, especially in sub-markets facing large-scale lease rollovers, concentrated new supply, or higher vacancy rates.

Colliers International also pointed out that Beijing, as a representative of China’s mature office market, currently has a pattern of “stable volume but falling prices, with regional differentiation,” which reflects the core characteristics of commercial real estate during China’s economic transition:

First, demand led by cost-sensitive businesses. Against a backdrop of a relatively slow economic recovery pace, companies place greater emphasis on controlling office costs. The appeal of high-rent areas in core districts continues to weaken, driving demand to spread into regions with better value for money;

Second, excess supply and intensified competition for existing stock. The current relatively high vacancy rate reflects the lagged impact of prior new supply ramp-ups. The market has moved into a competition phase for existing inventory, and landlords need to compete for limited demand through measures such as rent concessions and product upgrades;

Third, reconfiguration of core asset values. Financial Street, with limited new supply and strong industry support, is able to maintain a relatively stable market fundamentals; Zhongguancun, as China’s core area for technological innovation, has seen ongoing inflows of new office demand from a large number of technology innovation enterprises, driving this sub-market to record net absorption exceeding 120k square meters for two consecutive years. By contrast, sub-markets without clear industry anchoring may face a longer de-leveraging cycle and greater rental pressure.

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