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The impact of smog on the Beijing office market

BritCham / CBBC
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Poor air quality in Beijing has been the subject of much local and international scrutiny in recent years. Despite authorities’ considerable efforts, the combined effect of rapid urbanisation, explosive growth in the number of automobiles, the continued use of coal-fired power plants and inability to clamp down on industrial pollution continue to result in significant air pollution.
According to the Beijing Environmental Protection Bureau, the average density of PM2.5 in Beijing reached 85.9 micrograms per cubic metre in 2014, 1.5 times higher than the standard 35 micrograms per cubic metre set by the World Health Organization (WHO). During the same year, Beijing witnessed 175 days “with pollution”, among which 45 days saw “heavy pollution”. The city also witnessed an increase in density of PM10 due to dust and dry weather. In Mercer Consulting’s Quality of Life Survey released in March 2015, Beijing ranked only 118th out of 230 cities surveyed around the world, due largely to its poor air quality. Air pollution is beginning to negatively affect the appeal of Beijing as a place to live and do business, a trend that will have serious implications for the real estate industry.
In early 2015 CBRE conducted an online survey to more accurately gauge the impact of poor air quality on the Beijing real estate market. A questionnaire was distributed to 90 Beijing-based office occupiers from various industries including professional services, information technology and telecommunications, manufacturing, retail/consumer goods, finance, energy and pharmaceuticals/biological. The survey received 73 responses. Around 82% of respondents were multinational or foreign companies, including firms from Hong Kong, Macao, Taiwan and joint ventures. 18% were private companies including share-issuing enterprises. To complement the findings of the survey, CBRE also conducted a number of interviews with industry experts and office landlords, all of which were used to compile the key findings in the report.
Please find the report attached below.
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