Stagnant Rental Growth at China International Trade (Beijing CBD): Analysis of Strategic Responses from Leading Commercial Real Estate Operators

As a traditional core business district, Beijing Central Business District (CBD) is facing severe challenges of stagnant rental growth. According to the 2024 Q4 Beijing Grade A Office Market Report released by Knight Frank, the average rent in the CBD area has fallen below the RMB300 threshold, dropping to RMB291.9 per square meter per month, with a significant month-on-month decline [1]. This figure reflects the rental adjustment pressure on traditional core business districts against the backdrop of market supply-demand imbalance.

From a time perspective, the average rent of Beijing’s Grade A office buildings has continued to decline from RMB294.2 per square meter per month in Q1 2023 to RMB228.5 per square meter per month in Q3 2025, representing a cumulative drop of 22.3% [2]. As a traditional high-value area for Beijing’s office buildings, the CBD area still maintains a relatively high rental level, but its competitive advantage is weakening compared to Financial Street (RMB426.2 per square meter per month) and Zhongguancun (RMB312.6 per square meter per month).

The overall vacancy rate of Beijing’s Grade A office market has risen from 12.8% at the beginning of 2023 to 17.8% in Q3 2025, an increase of 5 percentage points [2]. The vacancy rate in the CBD area remains at 15.8%, which is lower than the city-wide average but has increased significantly compared to previous years. The formation mechanism of this phenomenon involves multiple factors:

First, uncertainties in the macroeconomic environment have led to a decline in corporate expansion willingness. Traditional major leasing industries such as internet, finance, and real estate have all experienced adjustments to varying degrees, and enterprises have generally adopted leasing strategies of “trading price for volume” or “cost reduction and efficiency improvement” [1]. Some tenants that originally leased Grade A office buildings have begun to move to Grade B or lower-grade properties, resulting in customer loss in the Grade A office market.

Second, the wave of withdrawal by foreign enterprises continues to escalate. Large-scale lease terminations and relocations by foreign financial institutions, foreign law firms, and manufacturing enterprises have had a significant impact on the office market in core areas [1]. These enterprises usually lease large areas, and their lease terminations directly lead to an increase in vacancy rates.

Third, new supply entering the market has intensified competition. In Q4 2024, two new projects in Beijing were completed and delivered, bringing 140,000 square meters of new supply [1]. It is expected that more than 600,000 square meters of new projects will enter the market in 2025, including the Zhaotai Financial Center Complex in Financial Street and the Z4 Minsheng Bank Project in the CBD area, which will further intensify market competition.

Beijing’s office market shows significant regional differentiation characteristics. Relying on its scarcity and agglomeration effect, the Financial Street area has the highest rental level (RMB426.2 per square meter per month) and maintains the lowest vacancy rate (12.4%) [1]. In contrast, emerging areas such as Lize, Yizhuang, and Fengtai face greater pressure, with the vacancy rate in Fengtai reaching as high as 32.5% and the rent being only RMB83.1 per square meter per month [1].

The CBD area presents typical characteristics of “volume-price game”: on one hand, hardware upgrades and acquisition of LEED green certifications for high-quality projects in the area have enhanced product competitiveness; on the other hand, tenants’ site selection logic for office space has become more pragmatic, with cost control becoming a core consideration, and the “location-quality” linkage preference (fly to quality) has become the mainstream [2].

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China International Trade Co., Ltd. (Stock Code: 600007.SS), as a landmark commercial real estate operator in the core area of Beijing CBD, its operating status directly reflects the real situation of the CBD market. As of January 10, 2025, the company’s market capitalization is approximately USD20.1 billion, with a per-share price of USD19.95 [3].

In terms of stock price performance, China International Trade’s stock price has fallen by 14.16% in the past year, but has risen by 23.53% over three years and 60.50% over five years [3]. This trend of long-term positivity and short-term pressure to some extent reflects the cyclical fluctuation characteristics of the commercial real estate industry. The company’s current price-to-earnings ratio (P/E) is 16.97 times, price-to-book ratio (P/B) is 2.12 times, and return on equity (ROE) remains at a relatively high level of 12.37% [3].

China International Trade’s financial indicators show stable profit characteristics. Its net profit margin reaches 31.28% and operating profit margin reaches 41.62%, both of which are at relatively high levels in the industry [3]. Looking at the latest quarterly results, the company achieved revenue of USD931 million in Q3 FY2025, with earnings per share of USD0.31 [3]. In recent years, the company’s revenue has shown a stable and slightly declining trend, slightly decreasing from USD985 million in Q3 2024 to USD931 million in Q3 2025, a decline of approximately 5.5% [3].

As a developer focusing on commercial real estate development and operation in the CBD core area, the company has relatively high-quality assets and stable cash flow. However, against the backdrop of overall market rental decline, the company cannot remain unaffected, and its rental income faces certain pressure.

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Facing structural changes in the office market, leading commercial real estate players represented by China Resources Land and Yuexiu Property have launched multi-dimensional strategic adjustments, demonstrating strong anti-cyclical capabilities and strategic foresight.

China Resources Land (01109.HK), as an industry benchmark, its response strategy has important reference value. The company has established a three-in-one strategic framework of “development and sales business + operational real estate business + light asset management business”, and has clearly defined the direction of transformation to “large-scale asset management” business [4].

In the first half of 2024, the company’s operational business revenue reached RMB20 billion, a year-on-year increase of 9.0%, with core net profit of RMB5.5 billion, a year-on-year increase of 14.4%, accounting for 51.4% of the company’s overall profit [4]. Among them, the gross profit margins of shopping mall and office building rents are as high as 77.7% and 74.8% respectively, significantly higher than the 12.4% gross profit margin of the development and sales business [4]. This structural change indicates that the operational real estate business is becoming the core support for the company’s profitability.

As of mid-2024, the asset management scale of China Resources Land reached RMB449.1 billion, an increase of 5.1% compared to the end of 2023 [4]. The company has actively promoted asset securitization, and the China Resources Commercial REIT with Qingdao Mixc as the underlying asset was successfully listed in March 2024, raising RMB6.902 billion, becoming the largest project among the first batch of public REITs for consumer infrastructure [4]. In addition, China Resources Land also holds the China Asset Management Huachao REIT, forming a REITs platform in the rental housing sector.

CR Mixc Lifestyle, as the company’s light asset management platform, had 108 operating shopping malls with a managed area of 11.85 million square meters, and 206 managed office building projects with a managed area of 15.23 million square meters as of the end of June 2024 [4]. This light asset output model enables scale expansion and brand output with low capital investment.

China Resources Land has actively disposed of inefficient assets, including the “commercial-to-residential” transformation of the Fuzhou Douchi Road Complex and the listing and transfer of equity in multiple subsidiary companies on the Beijing Equity Exchange [4]. This “vacate the cage to change the bird” strategy helps the company focus on core assets and improve overall asset quality.

Yuexiu Property (00123.HK) has formed a differentiated competitive advantage in the commercial real estate operation field by virtue of its unique “real estate + property trust” dual platform interactive model.

In the first half of 2024, the total operating income of Yuexiu Property’s commercial properties reached RMB1.331 billion, a year-on-year increase of 4.8% [5]. Among them, Yuexiu REIT (00405.HK) contributed operating income of RMB1.034 billion, and office buildings contributed income of RMB1.15 billion, accounting for 57% of Yuexiu REIT’s total revenue [6]. Through the “dual platform” model of development by Yuexiu Property and holding by Yuexiu REIT, the company has achieved effective collaboration between development and operation.

As the core asset of Yuexiu REIT, the Guangzhou International Finance Center (Guangzhou IFC) contributed annual revenue of RMB1.008 billion in 2024 [6]. The project implemented the strategy of “customized plan per tenant + product adjustment and renovation”, successfully attracting multiple high-quality tenants, and launched 7,200 square meters of finely decorated small and medium-sized units throughout the year, with a absorption rate of 82% [6]. The occupancy rate of Guangzhou IFC’s IFC Mall reached as high as 98.3% at the end of the period, and the annual passenger traffic increased by 7.4% year-on-year [6].

Yuexiu REIT covers diversified business formats such as office buildings, serviced apartments, specialized markets, and retail malls, with various formats collaborating and complementing each other, effectively hedging the cyclical risks of a single format. In 2024, Yuexiu REIT’s overall occupancy rate reached 84.5%, achieving operating income of RMB2.032 billion and net property income of RMB1.445 billion [6].

The manager of Yuexiu REIT seized opportunities in the RMB interest rate market and continuously adjusted the financing structure. The average interest payment rate in 2024 was 4.53%, a decrease of 7 basis points compared to the same period in 2023; the proportion of RMB financing at the end of the period increased from 39% at the beginning of the year to 60%, effectively reducing the risk of exchange rate fluctuations [6].

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Based on the current market supply and demand pattern, Beijing’s office market is unlikely to see a significant recovery in the short term. It is expected that the vacancy rate will remain at a high level of 17-18% in 2025, and there is still 5-8% downward space for rents. As a core business district, the CBD area is expected to see a smaller rental decline than emerging areas, but “trading price for volume” will remain the mainstream strategy [1][2].

The bright spot in the market is that the leasing demand from the TMT industry (especially the artificial intelligence, big data, and platform internet tracks) is steadily recovering, becoming the main contributor to the market’s net absorption volume. In Q3 2025, the net absorption volume of Beijing’s office market reached 75,597 square meters, maintaining growth for two consecutive quarters [2].

Facing market structural changes, it is recommended that commercial real estate enterprises carry out strategic adjustments from the following dimensions:

At the hardware level, projects in the CBD core area should enhance product competitiveness through systematic hardware upgrades and acquisition of green certifications such as LEED [2]. At the service level, it is necessary to strengthen value-added services such as customized decoration delivery, flexible lease term arrangements, and move-in ready offices to accurately match the cost reduction and efficiency improvement needs of enterprises.

Focus on attracting high-quality tenants from high-value-added industries such as TMT, finance, and high-end professional services. At the same time, improve customer stickiness and rental premium capability through the precise investment promotion strategy of “customized plan per tenant”. The successful practice of Yuexiu REIT at Guangzhou IFC shows that the introduction of high-quality tenants can significantly improve the project’s risk resistance capability.

Actively promote high-quality assets to enter the REITs market to achieve a complete closed loop of “investment-financing-management-exit”. The practices of China Resources Land and Yuexiu Property show that REITs platforms can effectively revitalize stock assets, reduce financial leverage, and improve capital operation efficiency.

Achieve scale expansion through management output, brand authorization, and other methods, while controlling capital expenditures and obtaining stable management fee income. The rapid development of CR Mixc Lifestyle confirms the feasibility of this model.

Use digital technologies to improve operational efficiency, such as smart building management systems, online investment promotion platforms, and customer relationship management systems. At the same time, explore innovative applications such as metaverse exhibition halls, AI fitting rooms, and VR store tours to create differentiated value for tenants.

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The stagnant rental growth at China International Trade (Beijing CBD) is a microcosm of the structural adjustment of the office market in Beijing and even the whole country. Under the superposition of multiple factors such as macroeconomic pressure, industry cycle adjustment, and foreign enterprise withdrawal, commercial real estate is undergoing a profound transformation from “incremental expansion” to “stock optimization”.

Leading commercial real estate players represented by China Resources Land and Yuexiu Property have demonstrated strong strategic resolve and adaptability through multiple strategies such as “large-scale asset management” transformation, asset securitization, light asset output, and product and service upgrading. These response measures not only help enterprises navigate through the trough of the cycle but also provide a reference path for the transformation and upgrading of the industry.

Looking forward, with the intensification of national steady growth policies, deepening consumption recovery, and warming demand in the TMT industry, Beijing’s office market is expected to gradually stabilize in 2025. However, market participants need to clearly recognize that the high-leverage, fast-turnover model of commercial real estate is a thing of the past, and refined operation and asset management capabilities will become the key factors determining the long-term competitiveness of enterprises.

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[1] Knight Frank Research Department. 2024 Q4 Beijing Grade A Office Market Report. https://content.knightfrank.com/research/1527/documents/zh-chs/bei-jing-xie-zi-lou-shi-chang-bao-gao-2024nian-q4-11822.pdf
[2] Knight Frank Research Department. 2025 Q3 Beijing Grade A Office Market Report. https://content.knightfrank.com/research/1527/documents/zh-chs/bei-jing-xie-zi-lou-shi-chang-bao-gao-2025nian-q3-12472.pdf
[3] Gilin AI Financial Database. Company Profile of China International Trade (600007.SS). 2026-01-10
[4] Guandian.cn. Through the Storm | China Resources Land Crosses the Curve. https://www.guandian.cn/article/20250204/465887.html
[5] Yuexiu Property. 2024 Interim Results Report. https://www.yuexiuproperty.com/tzzgx/tjcl/resource/61701646c9fe0e12e845b3487e0a73e9.pdf
[6] Sina Finance. Yuexiu REIT Releases 2024 Results: Stable Overall Operation, Annual Revenue of RMB2.032 Billion. https://finance.sina.com.cn/jjxw/2025-03-18/doc-inepztfu6915336.shtml

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This chart shows changes in core indicators of Beijing’s Grade A office market from Q1 2023 to Q3 2025. The left chart shows that the average rent has continued to fall from RMB294.2 per square meter per month to RMB228.5 per square meter per month, with a cumulative decline of approximately 22.3%; the right chart shows that the vacancy rate has risen from 12.8% to 17.8%, an increase of 5 percentage points. The two curves clearly show the market’s transformation from supply-demand balance to oversupply.

This chart compares the rental levels and vacancy rates of major business districts in Beijing. Financial Street ranks first with a rent of RMB426.2 per square meter per month and a vacancy rate of only 12.4%; the CBD area has a rent of RMB291.9 per square meter per month and a vacancy rate of 15.8%, which is at a medium level; the Fengtai area has a vacancy rate as high as 32.5% and a rent of only RMB83.1 per square meter per month, facing great absorption pressure. The core CBD area is highlighted in orange for easy identification.

This chart compares the commercial real estate business performance of China Resources Land and Yuexiu Property. China Resources Land’s operational business revenue reached RMB40 billion, office building managed area was 15.23 million square meters, and asset management scale was RMB449.1 billion, all significantly leading; Yuexiu REIT achieved differentiated development through the “dual platform” model, with a gross profit margin of 74.8% for its operational business, demonstrating high-quality asset operation capabilities.