MNCs help boost Shanghai office rents
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Grade A office rents in Shanghai's Puxi area rose the fastest in six years in the first quarter of this year as multinational companies (MNCs) continued to expand aggressively while those in Pudong New Area across the Huangpu River also grew steadily, major real estate service providers said Tuesday.
Average rents in Grade A office buildings in Puxi jumped 8.8 percent to 8.20 yuan (US$1.25) per square meter per day between January and March, the fastest quarterly growth registered since 2005, according to a market research released yesterday by Jones Lang LaSalle. In Pudong, average rents hit 7.70 yuan per square meter per day during the same period, a quarterly rise of 3.7 percent.
"Multinational firms continued to implement ambitious expansion plans, fueling confidence and prompting landlords to raise their prices," said Anthony Couse, managing director of Jones Lang LaSalle Shanghai. "Rents in premium buildings rose even faster, climbing 10.9 percent and 4.1 percent in Puxi and Pudong from the previous three-month period."
Robust demand by MNCs across all industries helped drive net take-up on both sides of the river.
According to Savills China, another global property service provider, a total of 148,000 square meters of Grade A space were taken up during the first three months of this year, outpacing supply for the third consecutive quarter. Vacancy rates, meanwhile, fell by 1.7 percentage points from a quarter earlier to about 10 percent, the company said.
The developer of Pujiang Prime, an 86,000-square-meter twin-tower office project located in a riverside area of Luwan District, has said it is very optimistic to sell up to 70 percent of its total space in less than one year, pinning hopes on strong demand, particularly in Puxi where new supply of quality office space remains inadequate.
