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Average Rents Of Grade A Office Buildings Decline
By Cherry Cao |
June 13, 2009, Saturday
|
Print Edition
Print Edition
AVERAGE rents for Shanghai's Grade A office buildings tumbled 6.8 percent in the first five months of this year because the market remained sluggish due to an oversupply and weaker demand.
Between January and last month, rents shed 9.5 percent on average in Pudong New Area where the majority of vacant office space is located while they fell an average of 6 percent in Puxi, Savills Property Services (Shanghai) Co said yesterday.
Meanwhile, in terms of supply, the existing weak economic condition has pushed back construction schedules at several projects across the city and therefore may reduce new supply for this year and the next, according to Savills.
According to Savills, Shanghai is now expected to have just under 590,000 square meters of new Grade A offices ready this year, down from an earlier prediction of about 750,000 square meters.
A record supply and the global financial turmoil began to bite into the city's Grade A office market late last year.
A total of 837,000 square meters of new Grade A properties, including 619,000 square meters in Pudong, were unveiled in the city last year but only 366,000 square meters were taken up during the same period, according to earlier Savills statistics.
The overall vacancy rate at Shanghai's Grade A office buildings hit the highest since 2005 in the first quarter of this year with Pudong the hardest hit.
Between January and last month, rents shed 9.5 percent on average in Pudong New Area where the majority of vacant office space is located while they fell an average of 6 percent in Puxi, Savills Property Services (Shanghai) Co said yesterday.
Meanwhile, in terms of supply, the existing weak economic condition has pushed back construction schedules at several projects across the city and therefore may reduce new supply for this year and the next, according to Savills.
According to Savills, Shanghai is now expected to have just under 590,000 square meters of new Grade A offices ready this year, down from an earlier prediction of about 750,000 square meters.
A record supply and the global financial turmoil began to bite into the city's Grade A office market late last year.
A total of 837,000 square meters of new Grade A properties, including 619,000 square meters in Pudong, were unveiled in the city last year but only 366,000 square meters were taken up during the same period, according to earlier Savills statistics.
The overall vacancy rate at Shanghai's Grade A office buildings hit the highest since 2005 in the first quarter of this year with Pudong the hardest hit.
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