AN IS­SUE OF SPACE

While in­dus­try in­sid­ers fore­cast a boom in of­fice space in Shang­hai, over­abun­dance is not ex­pected to be a big prob­lem in the com­ing years

China Daily (Canada) - - SHANGHAI -

surge from 6.4 mil­lion sq m in De­cem­ber 2015 to 8.95 mil­lion sq m and 9.55 mil­lion sq m in 2017 and 2018 re­spec­tively.

An­a­lysts fore­cast that the de­cen­tral­ized ar­eas will ex­pe­ri­ence a sim­i­lar growth — there will be a sup­ply of 1.5 mil­lion sq m and 1.1 mil­lion sq m through­out 2016 and 2017, in turn driv­ing the to­tal stock of grade A of­fice space to 4.46 mil­lion sq m and 4.8 mil­lion sq m in 2017 and 2018 re­spec­tively.

Fur­ther­more, several peerto-peer lend­ing en­ter­prises (P2P) have been forced to move out of pre­mium of­fice build­ings such as Shang­hai Tower af­ter the mu­nic­i­pal govern­ment an­nounced mea­sures to reg­u­late the ram­pant and risky in­dus­try in the first quar­ter of this year.

The new reg­u­la­tions sent a shock wave through the city’s of­fice leas­ing mar­ket as a num­ber of P2P com­pa­nies va­cated their premises, re­sult­ing in a rapid dip in oc­cu­pancy rates across of­fice build­ings in Shang­hai’s core busi­ness districts.

Ac­count­ing for more than 10 per­cent of the fi­nan­cial sec­tor’s of­fice leas­ing de­mand, P2P ten­ants ex­ert con­sid­er­able in­flu­ence in the cen­tral busi­ness district.

Ac­cord­ing to data by Col­liers In­ter­na­tional, the rental prices in Shang­hai’s grade A of­fice mar­ket slid 0.5 per­cent to 10.3 yuan per sq m per day fol­low­ing this ex­o­dus.

Some in­dus­try ex­perts be­lieve this pro­jected abun­dance of of­fice space will have a var­ied im­pact across the city, but may ul­ti­mately en­cour­age the healthy de­vel­op­ment of the mar­ket.

“The ac­tual fa­cil­i­ties, lo­ca­tions as well as ask­ing prices are quite dif­fer­ent from project to project, which means the ef­fec­tive sup­ply is ac­tu­ally much lower than our ex­pec­ta­tions,” said Al­bert Lau, CEO of Sav­ills China.

Zhang Yue, of­fice ex­ec­u­tive direc­tor of CBRE Eastern China’s ad­vi­sory and trans­ac­tion ser­vices, said that “the lim­ited sup­ply of of­fice spa­ces in lo­ca­tions such as West Nan­jing

PHOTOS BY GAO ERQIANG / CHINA DAILY

Huai­hai Road (left) and Lu­ji­azui (cen­ter) are pop­u­lar lo­ca­tions for com­pa­nies to have their of­fices, mean­ing that space avail­abil­ity is usu­ally low and rental prices are high. Devel­op­ers have urged busi­nesses to con­sider set­ting up their of­fices in the Hongqiao CBD (right) where space is aplenty and rates cheaper.

New of­fice build­ings are con­stantly pop­ping up in Shang­hai, pro­vid­ing an abun­dance of work­ing space for busi­nesses and cre­at­ing fierce com­pe­ti­tion be­tween devel­op­ers.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.