Beijing Olympics accelerates city development
Posted on May 12, 2008
Filed Under Actual
The 2008 Beijing Olympic Games will be opened on August 8, 2008. Since the city won the Olympic Games bid in 2001, approximately US$41 billion has been budgeted for its transformation and a substantial portion of this has been used to improve the environment and expand the city’s infrastructure.
“Beijing today is almost unrecognisable when compared to the city only a few years ago. The combination of government and private sector development and investment has transformed the urban environment,” said David Hand, Managing Director for Jones Lang LaSalle Beijing as quoted by its latest paper, Accelerating Towards a New Beijing that was released in mid-April.
Some sources have said the games may precipitate a downturn in the Beijing real estate market. But, in fact there is little direct correlation between the event and the key demand drivers that underpin Beijing’s real estate growth. The lasting impacts on the market will be positive as infrastructure expansion creates new commercial areas and supports the development of suburban residential hubs.
Meanwhile, the government, in improving Beijing’s development landscape, had facilitated the completion of a large amount of new, high quality space in key commercial areas. This has led to a substantial expansion in the high-end retail, office and residential sectors while putting slight downward pressure on rents directly following the games as demand drivers supporting this development will continue to grow, said another executive of Jones Lang LaSalle Beijing.
In 2007 and 2008, Beijing’s high-end property market is undergoing a dramatic expansion as total stock in the office, retail and residential markets is anticipated to grow by 52 percent, 89 percent and 58 percent respectively.
This expansion is building on a relatively small base at the top end of the market and that the figures represent the high end of the market as opposed to the mass market. This impact will be short term as anticipated strong demand will likely absorb residual vacant space in 2010 and 2011 when less new supply is expected.
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