SHANGHAI'S Grade A office market remained generally stable in the first quarter of this year despite abundant new supply with decentralized market continuing to outperform, global real estate services provider JLL said in a report released today.
Rents in CBD areas remained flat while those in decentralized market rose by a moderate 1 percent quarter over quarter, mainly fuelled by emerging CBDs such as the Railway Station cluster and the North Bund cluster.
"With net absorption exceeding 162,000 square meters, the decentralized market continued to see impressive leasing momentum in the first three months of this year," said Anny Zhang, head of markets for JLL Shanghai. "Notable deals included PepsiCo's 7,000 square meters' lease in Gopher Center and Metlife's 3,500 square meters' lease in Landmark Center."
A record 528,000 square meters of Grade A office space spanning four projects including the Shanghai Tower in Lujiazui reached completion in the CBD areas between January and March while seven projects with a total gross floor area space of 442,000 square meters entered the decentralized market during the same three-month period, pushing vacancy higher across the city.
Vacancy climbed 5.2 percentage points from the previous quarter to 13.1 percent in the Pudong CBD while it gained 3 percentage points to 12.1 percent in the Puxi CBD. In the decentralized market, it reached 22.5 percent, an increase of 4.5 percentage points from the last quarter of 2016, JLL data showed.
--source from Shanghai Daily