Beijing to see the fastest office rental growth

Beijing will see the fastest office rental growth this year and in the next five years, with rents expected to surpass Shanghai in 2013, real estate consultancy company DTZ said in a report on Tuesday.

Due to strong demand and limited supply, Beijing's prime office rental growth was the largest in the country, with a 46.8 percent year-on-year increase at the end of the first half, and with rental levels edging closer to Shanghai, according to the report.

Office rents in some second-tier cities, including Shenyang and Chongqing, also saw strong growth above 20 percent year-on-year, thanks to a series of new projects launched in the past six months, which drove up the overall rents level.

"Looking ahead, we will continue to see relatively high supply in the second-tier cities while shortage will persist in Beijing for the rest of the year. Beijing will see only 988,348 sq m of new supply between now and 2014, which is equivalent to19 percent of the current total stock," the report said.

The report said that Beijing's prime office rents will increase 29 percent in 2012.

In second-tier cities, abundant future supply relative to existing stock and stable demand will continue to mute rental growth this year, the report said.