Office market extends rebound

SHANGHAI’S Grade A office market continued to recover in the third quarter as strong leasing demand further raised rents and reduced vacancies, global property consultancy JLL said in its latest quarterly report.

Around the city, net absorption, a barometer of market demand for office space, totaled 386,000 square meters between July and September, with CBD areas recording 174,000 square meters and the rest in decentralized markets.

“Domestic financial services and professional services firms remained active in Lujiazui, while demand in Puxi was mainly driven by sectors including financial services, professional services, retail and TMT (technology, media and telecom),” said Neo Huang, head tenant representative for JLL Shanghai Office Leasing Advisory.

“Notably, inquiries from pharmaceutical firms also picked up, especially in the Qiantan submarket.”

Overall CBD rents gained at a faster pace, climbing 0.9 percent from the previous three months. In Puxi, they edged up 1.8 percent, mainly fuelled by increases in premium buildings, while on the other side of the Huangpu River, rents remained largely unchanged with widening performance gaps between submarkets and individual buildings. In decentralized locations, overall rents rose 1.3 percent quarteron-quarter, boosted by strong players including the Qiantan submarket.

The overall CBD vacancy rate fell 1.7 percentage points quarter on quarter to 9.3 percent, with decreases in Puxi and Pudong.

In decentralized areas, however, large amounts of new supply, which totaled 420,000 square meters, pushed vacancy rates up by 1.3 percentage points.

JLL, a nearly three-decade player in the Chinese mainland real estate market, has recently launched “Zhenliang,” a commercial real estate valuation and asset management platform.