Core Insights - The Beijing office market is experiencing a downturn characterized by declining rents and high vacancy rates, with overall vacancy at 17.7% and rents down 17.0% year-on-year and 5.7% quarter-on-quarter [2][6][10] - Despite these challenges, net absorption has doubled to 92,000 square meters, indicating a selective optimization of space by companies, suggesting a strategic shift rather than a complete market freeze [2][6][10] - The value logic of office spaces is transitioning from rental income to operational efficiency and structural alignment, with a focus on tenant experience and organizational needs [5][6][22] Market Trends - The average effective rent in Beijing is 232 yuan per square meter per month, with significant variations across districts, highlighting a growing disparity in asset performance [10][11] - Traditional sectors like finance and energy are adopting a more cautious approach, focusing on space optimization rather than expansion, leading to a re-evaluation of their space assets [7][22] - The demand from tech and emerging industries is driving leasing activity, particularly in areas like Zhongguancun and Wangjing, where companies prioritize flexibility and service-oriented spaces [6][11][22] Investment Considerations - The operational capability of office assets is becoming a critical factor in investment decisions, moving away from traditional metrics like location and vacancy rates [15][22][26] - Investors are encouraged to assess the long-term cash flow generation potential of properties, focusing on tenant structure and the ability to adapt to changing market conditions [23][24][26] - The market is entering a phase where the sustainability of asset value is determined by its operational efficiency and tenant retention capabilities, rather than just current rental prices [22][26][27]