Beijing has been the political centre of China for much of the past 800 years and is a modern city of contrasts. It has seven UNESCO World Heritage Sites including the Forbidden City, the Summer Palace and parts of the Great Wall of China, while its Zhongguancun area is known as China's Silicon Valley and a centre for technology innovation and entrepreneurship.
Beijing’s housing market continued to moderate in 2018, following a series of cooling measures. The average house price in 2018 ended up in line with the previous year, which marks a sharp slowdown on the average of 11.5% growth year-on-year over the last decade.
As part of a wider development strategy, called the Beijing Municipality Master Plan (2016–2035), the government has tightened the availability of land to develop housing for sale. Supply of commercial real estate will be under tighter control and the core assets of mature regions will become increasingly scarce.
Instead, there is increasing focus to provide affordable housing options and in particular housing for long-term rent. As part of this, the government has encouraged redevelopment of underused retail, office and hotel buildings in the central parts of Beijing into rental apartments.
This will provide cost-effective living options for workers who want to live in central Beijing but cannot afford to buy a property.
There is also an excellent opportunity to increase the supply of serviced apartments that target the high-end market, in which employers look to provide comfortable accommodation for their employees in an effort to retain top talent in Beijing’s fiercely competitive labour market.
A further trend is to provide value-added services to tenants in order to increase bargaining power and improve yields. The profit margins of niche markets in the long-leased apartment sector such as senior housing and student apartments can be boosted because of close ties to healthcare and educational services, for example.