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Owner-occupiers drive Grade A market
By Cao Qian |
March 9, 2011, Wednesday
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Print Edition
Print Edition
OWNER-OCCUPIERS will take up over one-third of the more than 1 million square meters of new Grade A office space that will be released in Shanghai this year, a major international real estate services provider predicted yesterday.
Some 369,000 square meters of new Grade A spaces, or 36 percent of the total, will be taken by owner-occupiers this year in the city, Colliers International said. In 2010, only 30,000 square meters, or 12 percent, of the total of 252,000 square meters that were released were taken up by owner-occupiers.
"The rising demand from owner-occupiers is probably due to a number of factors," said Lina Wong, managing director for east and southwest China operations at Colliers. "Strong liquidity among occupiers, potential for capital value appreciation for office properties as well as the need for high-profile office locations by more companies from home and abroad all contributed to the trend."
Grade A offices may see their capital values climb by an average 5 percent in Shanghai over the next four years, helping the city maintain its attractiveness to investors, Colliers said.
Ping An Insurance and the Agricultural Bank of China are among the new owner-occupiers this year.
The Ping An International Finance Center in the heart of Little Lujiazui area will be 100 percent occupied by the insurer. The AgBank also plans to move into an 85,073-square-meter office tower in the CITIC Shipyard development, which it purchased for 3.77 billion yuan (US$573 million) in the third quarter of last year.
A separate report released by Jones Lang LaSalle also predicted that more than half of the 758,392 square meters of new office space slated to be released in Pudong New Area this year will be occupied by owners themselves.
The property consulting firm estimated rents in Shanghai's Grade A office market on both sides of the Huangpu River may rise by an average of 10-15 percent this year.
Some 369,000 square meters of new Grade A spaces, or 36 percent of the total, will be taken by owner-occupiers this year in the city, Colliers International said. In 2010, only 30,000 square meters, or 12 percent, of the total of 252,000 square meters that were released were taken up by owner-occupiers.
"The rising demand from owner-occupiers is probably due to a number of factors," said Lina Wong, managing director for east and southwest China operations at Colliers. "Strong liquidity among occupiers, potential for capital value appreciation for office properties as well as the need for high-profile office locations by more companies from home and abroad all contributed to the trend."
Grade A offices may see their capital values climb by an average 5 percent in Shanghai over the next four years, helping the city maintain its attractiveness to investors, Colliers said.
Ping An Insurance and the Agricultural Bank of China are among the new owner-occupiers this year.
The Ping An International Finance Center in the heart of Little Lujiazui area will be 100 percent occupied by the insurer. The AgBank also plans to move into an 85,073-square-meter office tower in the CITIC Shipyard development, which it purchased for 3.77 billion yuan (US$573 million) in the third quarter of last year.
A separate report released by Jones Lang LaSalle also predicted that more than half of the 758,392 square meters of new office space slated to be released in Pudong New Area this year will be occupied by owners themselves.
The property consulting firm estimated rents in Shanghai's Grade A office market on both sides of the Huangpu River may rise by an average of 10-15 percent this year.
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