Posted in Finance

Shanghai, Beijing office vacancy rates hit 10-year high

 2021年2月5日

Vacancy rates in many Chinese office markets continue to rise in 2020 due to the impact of the Communist China virus Epidemic. Colliers International, a global real estate services listed company, reported that vacancy rates in the Shanghai and Beijing office markets will both hit a 10-year high in 2020.

Colliers International’s research report shows that Shanghai’s office market will have a total supply of 1.185 million square meters in 2020, with a vacancy rate of 22.7%, a 10-year high, and an average rent of RMB 7.64 per square meter per day, a 10.7% year-over-year decline, according to Distressed Asset Industry Insights on February 5.

As we enter 2021, the pressure on the Shanghai office market remains unabated.

Colliers International points out that the new supply of office space in Shanghai will peak in 2021-2022, with an annual average of over 2 million square meters of new supply entering the market, which will likely cause the market vacancy rate to rise further and rents will likely come under greater pressure.

According to data released by Jones Lang LaSalle, the vacancy rate in Shanghai’s central business district rose 2.0 percentage points year-on-year to 12% in 2020 due to new supply in Changning District; vacancy rates in non-central business districts were affected by new supply, reaching a high of 31% in the third quarter of 2020, and rebounding to 29.6% in the fourth quarter supported by cost-controlled demand.

According to Colliers International, Beijing’s office vacancy rate moved higher to 19.4% in 2020, a near 10-year high, due to the CCP virus outbreak. At the same Time, office rents have dropped significantly. 2020 overall office rents in Beijing will be RMB 351 per square meter per month, down 8.4% year-over-year and a new record for the past 10 years.

Colliers International expects that pressure on Beijing’s Grade A office market may increase unabated due to the concentration of close to 1.6 million square meters of new projects coming to market in 2021 (over 900,000 square meters in 2019).