CENTEK(SZ:000931) Bei Ke Cai Jing·2025-12-31 11:21Core Insights - The demand for Beijing's office market is recovering more than expected, with a significant reduction in vacancy rates by year-end 2025 [1] - The net absorption of Grade A office space in Beijing reached 330,000 square meters in 2025, marking the second consecutive year of over 300,000 square meters of absorption [1] - The new supply of Grade A office space in Beijing for 2025 was only 188,000 square meters, leading to a favorable balance between limited supply and steady demand, resulting in a vacancy rate decrease to 19.2%, down approximately 1.5 percentage points year-on-year [1] Market Performance - The net absorption of Grade A office space in 2025 was 333,000 square meters, compared to 312,000 square meters in 2024, while Grade B office space saw a net absorption of 94,000 square meters, a significant increase from a negative absorption of 32,000 square meters in 2024 [2] - The overall vacancy rate for the office market in 2025 was 20.7%, with Grade A offices at 19.2% and Grade B offices at 19.6% [2] - The average effective rent for Grade A offices decreased to 222 RMB per square meter per month, reflecting an 11.5% year-on-year decline, although the rate of decline has slowed compared to the previous year [2] Submarket Highlights - The Zhongguancun area emerged as the standout performer in 2025, with a net absorption of over 176,000 square meters, accounting for 53% of the city's total, marking a peak not seen in nearly 20 years [3] - The growth in demand in Zhongguancun is driven by the rise of new productivity enterprises and the concentration of industrial benefits, positioning it as a key engine for the recovery of Beijing's office market [3] - There is a notable disparity in performance between core and non-core areas, with average rents in mature core submarkets declining by over 10% year-on-year, indicating a competitive landscape across different asset classes and market segments [3] Future Outlook - The macroeconomic demand remains a systemic issue that could hinder the sustained recovery of the office market, with potential tenant downsizing and relocations expected in 2026 [4] - The supply-demand mismatch is anticipated to become more pronounced, with over 700,000 square meters of new supply expected in core markets in 2026, while demand is concentrated in western submarkets [4] - The majority of new projects entering the market in 2026 will be located in eastern submarkets, potentially intensifying competition in those areas [4]