Shanghai Grade A office rents keep rising

By Cherry Cao | January 14, 2015, Wednesday |

Online Edition

GRADE A office rents on both sides of the Huangpu River continued to climb in the last quarter of 2014 with demand from domestic companies remaining strong, according to latest research released by major international real estate services providers.

In Pudong, rents kept rising steadily, up 0.9 percent quarter on quarter to 10.1 yuan (US$1.63) per square meter per day, whilst in Puxi, Grade A office rents rose 0.6 percent from the previous quarter to 8.8 yuan per square meter during the October-December period after trending downward for much of 2014, Jones Lang LaSalle said in a report released today.

"Domestic and joint venture financial institutions were active in the Pudong CBD office market," said Anthony Couse, managing director for JLL East China. "MNC retailers, meanwhile, were also actively seeking opportunities for upgrading and expanding their office space."

Major leasing deals registered in the fourth quarter of last year included New Development Bank's leasing of 6,000 square meters in Oriental Financial Center in Pudong and American retailer VF Corporate's leasing of 8,000 square meters in Henderson 688 across the river.

Carlby Xie, director of research for Colliers International's China operation, also shared a similar view.

"Corporate clients from the finance and professional services sectors, as well as retail and trading firms, were actually primary demand generators throughout the whole year," Xie noted. "In particular, domestic companies played a larger role than MNCs in generating demand for expansions and new set-ups."

Looking forward, Grade A office rents are expected to continue to grow in Pudong, although at a slower pace compared to 2014, while in Puxi, rents are projected to remain flat in the coming 12 months.

"Although Pudong and Puxi will both witness a large volume of new supply in 2015, which should be around 630,000 square meters in total in the city, rising demand from domestic tenants is expected to prevent a decline in rents in both markets," said Anny Zhang, head of Pudong markets for JLL Shanghai.

Business Real Estate

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Shanghai Grade A office rents keep rising

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