Q1 Monthly Rent 56 Yuan per ㎡
Supply Surges in 2022-2023 Causing Demand-Supply Reversal
Due to excessive supply during the COVID-19 spread period, logistics warehouse rents in Beijing, China, have fallen for the first time in 14 years. Vacancy rates have also exceeded 16%, increasing the number of empty spaces.
On the 28th, Chinese economic media Caixin cited data from CBRE, a comprehensive real estate service company in China, reporting that the monthly rent for logistics warehouses in Beijing in the first quarter was 56.5 yuan per square meter (approximately 10,725 KRW), down 1.4% compared to the same period last year. Caixin explained, "Over the past two years, the logistics industry's boom has significantly increased related real estate supply and investment," adding, "The state of supply shortage lasting more than 10 years has ended, and now the relationship between supply and demand has reversed."
During the same period, the net absorption of Beijing's logistics warehouse market recorded a negative 19,000㎡, marking the first negative figure in 10 quarters. A negative net absorption means that the number of lease contract terminations by tenants during the statistical period exceeded the number of new lease contracts.
At the same time, the vacancy rate of logistics warehouses in Beijing reached 16.4%, an increase of 1.4 percentage points compared to the same period last year. CBRE explained, "Due to cost reduction, efficiency improvement, and downsizing of their own businesses, tenants have been relocating logistics warehouses within Beijing or moving outside, resulting in more contract terminations."
Caixin added, "During the COVID-19 spread period, influenced by increased e-commerce demand, logistics-related real estate was considered to have stable returns and long-term investment value," further noting, "It especially emerged as a star in the real estate market in 2022, with active land supply and investment."
In fact, in 2022 alone, the supply of logistics and storage-related real estate in Beijing reached a record high of 771,000㎡. Although it decreased to 284,000㎡ last year, it still significantly exceeded the past average annual level of 100,000㎡.
Caixin reported, "Among various regions, rents in Pinggu District (Pinggu-gu) fell the most, and rents in other markets such as Tongzhou and Daxing also declined," while "rents in areas like Shunyi and Majiaoqiao have shown relatively stable trends." Although the logistics rental market is going through a cooling period, CBRE forecasts that 389,000㎡ of logistics warehouses will be newly supplied in Beijing in the second and third quarters of this year.
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