office-market-Q1--2011(1).doc

A quarterly overview of Beijing office market北京写字楼物业市场季度概览First quarter 2011 / 2011 年第一季度Market OverviewAfter stronger than expected performance last year, the latter half in particular, Beijings office property market saw a further boom in 1Q11, demonstrating signs of another prosperous market cycle. The overall vacancy rate expe-rienced a dramatic decline of 9.61 percentage points y-o-y, underpinned by demand from both indigenous and overseas enterprises with genuine business opportunity and consequent headcount increment in the capital. On the other hand, sustained landlord-favourable market conditions combined with the increasing number of tenants with adequate budget pushed rentals to the highest ever level as of end-1Q11. The office property investment market remained active while capital values witnessed significant y-o-y growth of more than 20% during the quarter. 市场概览2011年第一季度，北京写字楼物业市场在去年， 尤其是下半年，超出市场预期的强劲表现之上进一步繁荣，市场步入新一轮上升周期。大量内资及跨国企业在本地经济发展中获得实在的商业机会并随之进行人员扩张，由此带来的写字楼面积需求使市场整体空置率较2010年同期大幅下降9.61个百分点。另一方面，持续的业主方市场行情加之预算充足之租户的增多将整体租金推升至有史以来最高水平。写字楼物业投资市场继续保持活跃，资本值本季度同比上涨超过20%。SupplyWhile no new supply was launched in the Grade B sector, two Grade A schemes, Beijing IFC in the CBD area and Tsinghua Tongfang Hi-Tech Plaza Tower D in the Zhongguancun Area, were completed in 1Q11, collectively injecting approximately 190,585 sqm of office space to the stock. As a result, the total stock of the Beijing office market expanded to 11.67 million sqm, up 1.66% q-o-q.供应季内，两个甲级写字楼项目竣工入市，分别为CBD区域的北京财源国际中心与中关村区域的清华同方科技广场D座，共为市场新增190,585平方米写字楼面积，而乙级写字楼市场无新项目入市。至此，北京写字楼市场总存量达到1,167万平方米，环比增长1.66%。DemandIn this quarter, solid demand was widely spread in various kinds of industrials, such as manufacturing, automobile, pharmaceuticals, energy, media, technology, consulting, IT and finance. Of all the leasing demand generators, MNCs gearing up for expansion became the most significant market highlights, as evidenced by a series of large-sized deals, including Toyotas take-up of 22,000 sqm at China Overseas Plaza, Bayers leasing of 30,000 sqm at Jia Ming Centre, Volvos commitment to 7,000 sqm at the Office Park Tower C and Yahoo!s leasing of 7,500 sqm at Tsinghua Tongfang Hi-Tech Plaza Tower D. Correspondingly, the overall vacancy rate of Beijings office property market dropped by 2.75 percentage points q-o-q, or 9.61 percentage points y-o-y, to 7.10% as of end-1Q11. Meanwhile net absorption peaked at 492,905 sqm, with that in the CBD and Lufthansa areas accounting for 44.70% and 21.91% of the total, respectively.需求本季，市场对于写字楼面积的强劲需求广泛分布于多个行业，如制造、汽车、医药、能源、媒体、科技、咨询、IT和金融等。而在所有需求来源中， 加速扩张的跨国企业成为市场焦点，数个大面积租赁合约于季内成交。譬如： 丰田在中海广场租赁22,000平方米；拜耳在嘉铭中心租赁30,000平方米；沃尔沃在远洋光华国际C座签约7,000平方米以及雅虎在清华同方科技广场D座签约7,500 平方米。与活跃的租赁市场相呼应，市场整体空置率环比下降2.75个百分点，同比下降9 . 6 1个百分点，至7 . 1 0%。同时，市场净吸纳量达到492,905平方米，其中CBD和燕莎区域净吸纳量分别占总量的44.70%和21.91%。RentsRental expectation among most landlords continued to grow, with some particular buildings that have successfully attracted or retained major renowned tenants increased rental offerings by 20% to 30% over last quarters. On the other hand, tenants, especially domestic occupiers eager to upgrade their image, allocated more of their budget to office accommodation. Collectively, the overall average net effective rent of the Beijing office property market (including Grade A and Grade B) were pushed to RMB165.06 psm per month, up 6.65% q-o-q or 21.86% y-o-y. By submarkets, the rental growth rates in the CBD, East Chang An Avenue and Lufthansa areas surpassed the overall market, up by 10.38%, 10.54% and 8.84% q-o-q, respectively. Financial Street remained the most expensive submarket at RMB207.79 psm per month.租金大部分业主对租金的期望值继续上升，某些成功吸引或续约主力租户与知名租户的楼宇将租金较上季度提高了20%至30%。另一方面，更多租户增加了对办公场所开支的预算，其中尤以致力提升企业形象的内资租户为代表。综合作用下，北京写字楼物业(含甲级与乙级)整体平均净有效租金被推升至每月每平方米165.06元，环比上涨6.65%，同比涨幅达21.86%。各子市场中，CBD、东长安街和燕莎区域的涨幅超过整体市场水平，分别环比上涨10.38%,10.54%和8.84%。金融街子市场依旧为最昂贵的办公区域，租金为每月每平方米207.79元。InvestmentThree en bloc sales transactions were concluded in 1Q 2011, demonstrating an active scene in Beijings office investment market. China Minmetals Corporation purchased the Fifth Square with a total GFA of over 120,000 sqm for RMB4.5 billion. SOHO China announced on 31 December 2010 the acquisition of an office building under construction in the Zhongguancun area for a consideration of RMB1.155 billion. In addition, Jinhui Centre in the Fengtai District, one of the distressed projects dragging for the longest time in Beijing, was purchased by a private-owned enterprise for RMB280 million. Another significant investment activity worth mentioning is Financial Street Holdings acquisition of the land use rights of plots B, C and D of the Beijing CITIC Town from CITIC Real Estate, for a consideration of RMB4 billion. These plots have a total planned GFA of 200,000 sqm and are planned to be developed as a complex comprising office, hotel, residential and retail components.投资三宗整售交易在第一季度成交，显示出北京写字楼投资市场活跃的状态。中国五矿集团公司以45亿元收购总建筑面积超过12万平方米的第五广场。SOHO中国于2010年12月31日宣布斥资11.55亿元收购位于中关村区域的某在建写字楼项目。此外，位于丰台区的金汇中心被某民营企业以总价2.8亿元收购，此楼为北京烂尾时间最长的项目之一。另一值得提及的投资动态为，金融街控股以总价40亿收购中信房地产有限公司拥有的北京中信城B、C、D地块的土地使用权，该批地块总规划建筑面积为20万平方米，计划建为包括办公楼、酒店、住宅及零售等业态的综合体。OutlookBeijings major economic indicators, such as FAI and Added Value of Industrial sector expanded at anywhere between 9% to 20% y-o-y in the first two months of 2011 (Beijing Municipal Bureau of Statistics, March 2011), representing continued healthy macro fundamentals for the office property market in the locality. In addition to the foreseeable favourable economic climate, we considers that demand growth should be sustainable and steady for the rest of 2011, based on the observation that a wide range of industries are engaged in this round of expansion rather than having some particular sectors boosting the market. Moreover, tenants with domestic background are gradually playing a more important role in the leasing market, diminishing the markets sensitivity of exposure to the global economy volatility.The Beijing office market is expected to receive eleven new projects with a total office GFA of approximately 625,000 sqm in the residual period of 2011, including four schemes in the Grade A sector. The overall vacancy rate should fluctuate slightly as the total stock expands, nevertheless, the extent of this fluctuation should be limited to only one to two percentage points, ensuring the indicator remains below 10% during 2011. Low availability of effective office space in core submarkets in collaboration with aforementioned solid demand should further enhance landlords negotiation leverage, yielding a continuous rental growth across the market. However, a slowing of the rental growth pace in the next three quarters, given the existing high level of rents and the fact that some cost conscious tenants or those with flexible location strategies are starting to consider alternatives in decentralised areas with lower rents, such as Yizhuang, Shangdi and Wangjing.Investment opportunities are expected to enlarge in the Beijing office property market in 2011, as more landlords exhibit willingness to offer their properties for en bloc sale in order to take advantage of current buoyant market landscape, either for optimisation of the assets portfolio or financing considerations. Notwit