Beijing Office Rents Price Determination Method

Currently housing industry has become a main supporting industry for our national economy. After the lows of the past several years, business lease is showing signs of recovery. There are many ways to estimate sale value of a business building, but there are big difference between an office building and a commercial house/apartment. Commercial houses are mainly intended for personal living, emphasizing on surrounding locations (transportation), apartment layout, orientation and green living environment. But business buildings are daily working locations, taking more consideration of surrounding business environment, the quality of building itself, transportation, acceptable rental rates for business partners and overall quality of leasing companies. So the rental rate has to be determined according to the special needs of potential customers and it differs greatly from that of the commercial houses. Determination of business rental rate is the key to the profitability for real estate developers. It is thus very important to work out a rental rate that can both meet the needs of profitability for the developers and satisfy customer demands, and at the same time helps setting up an appropriate rate calculation method for future leasing operation . This article is based on author's multiple years of working experience with business leasing. Through analysis of supplies and demands of business building in Beijing, and structural changes in demands in the past several years, described in details various factors that affect business rental rates. Through discussion of several commonly used methods for rental rate determination, a basic principle was extracted for the determination of rental rate for business buildings. Based on the principle that market demands direct the price, several characteristic factors that affect office rental rate were discussed. A characteristic comparison method was proposed to accurately determine office rental rates. This method was further employed in the actual practice of Qingya Mansion, and achieved actual effect. It is hoped that this method can provide a reference and assiatance for developers in strategic planning during marketing operation.