Grade A office market shows some optimism in Puxi

By Cherry Cao | October 16, 2013, Wednesday |

Online Edition

SHANGHAI'S Grade A office market in central business district areas continued to register a mixed performance in the third quarter with Puxi seeing some signs of a coming pick-up in business amid increasing optimism among corporate tenants, major international real estate services provider Jones Lang LaSalle said in its latest quarterly report.

Pudong Grade A rentals climbed 1 percent quarter-on-quarter to 9.2 yuan (US$1.50) per square meter per day while rents in Puxi remained flat at 9 yuan per square meter during the July-September period, according to data released today.

"Office rental growth in Pudong remained strong due to a lack of supply and robust demand from domestic companies while there was also an increase in enquiries for space in Puxi," said Anthony Couse, managing director of Jones Lang LaSalle Eastern China. "After being cautious for the past several quarters, companies have grown more confident and have put expansion plans back on the agenda."

More than 30 percent of the space in Henderson 688 and 5 Corporate Avenue, for instance, was under negotiation by quarter's end, an indication of strong market sentiment, Jones Lang LaSalle research found. Both projects are due for completion next year.

"We expect the rising number of enquiries witnessed in Puxi during the quarter to translate into leasing transactions in early 2014," said Anny Zhang, national director of markets at Jones Lang LaSalle.

In the city's decentralized office market, meanwhile, average rents rose 1.1 percent from the previous quarter to 5.3 yuan per square meter per day as a growing number of companies, particularly from the logistics, manufacturing and pharmeceutical sectors, are showing interest in relocating to decentralized areas to secure contiguous space at lower costs.

Real Estate

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Grade A office market shows some optimism in Puxi

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