Property News · July 25, 2016

High-end Shanghai office rents experience slowed growth


Top-end office rent growth for Q2 comes to a crawl on both sides of the Huangpong River
China’s largest city lights up. Image credit: jo.sau (Flickr)
Grade A office rents have been more subdued than usual in Shanghai.
In a new report, Jones Lang LaSalle (JLL) found that the top-end office market inched up only 0.6 percent in Shanghai’s Puxi area between the first and second quarters of 2016. This is the slowest rental growth for grade A spaces within the city’s historic district in the last six quarters.
On the other side of the Huangpong River, in futuristic Pudong district, the market grew just 1.1 percent from April to June, compared with 1.7 percent in January to March.
“While domestic finance companies and multinational retailers continued to be active in the CBD areas, strong rental growth over the past year has led some tenants to consider less expensive options in decentralized markets,” Eddie Ng, managing director for JLL East China, explained.
“This process is creating opportunities for landlords in sub-markets near the CBD such as the railway station and the North Bund areas,” he added.
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True enough, around 50 percent of new supply will emerge in the Hongqiao Transportation Hub by the end of the year, Savills forecasted in its previous quarterly report.
Puxi’s grade A office rents grew CNY9.90 (USD1.48) per square metre a day between April and June, while those for Pudong grew CNY11.40 (USD1.70) per sq m a day.
Compounding this plodding pace are almost 600,000 square metres of new supply that will pour into the Shanghai core office market until December.
According to Savills, vacancy rates in every district of the city may increase as a result, although vacancies will be more pronounced in Puxi than Pudong, Shanghai Daily reported.
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Source : property-report.com
Read more…High-end Shanghai office rents experience slowed growth

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