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Office vacancy rate to beat 20%
By Cao Qian |
January 7, 2009, Wednesday
|
Print Edition
Print Edition
THE vacancy rate of Grade A office buildings in Shanghai tripled in 2008 from the year before and is expected to exceed 20 percent in 2009, one of the world's Big Five real estate service providers predicted yesterday.
"The overall vacancy rate for Shanghai's Grade A offices jumped to 15.4 percent by the end of last year while it was only around 5 percent at the end of 2007,'' said Albert Lau, managing director of Savills Property Services (Shanghai) Co Ltd. "A record supply coupled with sluggish demand will push the rate above 20 percent in 2009.''
Savills' data showed that last year a total supply of 837,000 square meters (including 619,000 square meters in Pudong New Area) of Grade A office space came onto the market in Shanghai, the biggest in its history. But only 366,000 square meters were taken up.
"The supply glut will span at least through 2010 with another 754,000 square meters of space becoming available in 2009, and that will make the situation even tougher for landlords'' in rent they can command, Lau said.
Among all areas in the city, rents in Pudong dropped the most due to the huge supply. Rents in Pudong's Grade A offices declined 8.3 percent on average from a year earlier and those in Lujiazui plunged nearly 10 percent.
Rents across the city would continue to decline by 5 percent to 15 percent in 2009, according to Savills.
"The overall vacancy rate for Shanghai's Grade A offices jumped to 15.4 percent by the end of last year while it was only around 5 percent at the end of 2007,'' said Albert Lau, managing director of Savills Property Services (Shanghai) Co Ltd. "A record supply coupled with sluggish demand will push the rate above 20 percent in 2009.''
Savills' data showed that last year a total supply of 837,000 square meters (including 619,000 square meters in Pudong New Area) of Grade A office space came onto the market in Shanghai, the biggest in its history. But only 366,000 square meters were taken up.
"The supply glut will span at least through 2010 with another 754,000 square meters of space becoming available in 2009, and that will make the situation even tougher for landlords'' in rent they can command, Lau said.
Among all areas in the city, rents in Pudong dropped the most due to the huge supply. Rents in Pudong's Grade A offices declined 8.3 percent on average from a year earlier and those in Lujiazui plunged nearly 10 percent.
Rents across the city would continue to decline by 5 percent to 15 percent in 2009, according to Savills.
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