China’s A-Ha Xiamen welcomes peak supply this year
DTZ recently issued a research report “2018 China’s Grade A Office Supply Core Trends" to review the changes in the Grade A office market in the past year. The report mainly focuses on the Grade A office market in the six major cities in the Mainland from the perspective of supply, including Beijing, Shanghai, Shenzhen, Guangzhou, Chengdu and Wuhan. The report predicts that the peak supply of the Grade A office market in several major cities in Mainland China will usher in 2018, but in the next two years, new supply will slow down.
First of all, in Beijing, in 2018, the pre-leasing of new projects in the CBD (central business district) will be active. With the introduction of high-quality office buildings, the average rents in the five core regions may increase further; the market supply will be 65% concentrated in the next three years. In non-core areas.
In Shanghai, in 2017, local new supply reached 1.4 million square meters, and 24 new Grade A office projects were launched. It is estimated that the new supply will reach 3.8 million square meters in the next three years, and the core business district and emerging business district will contribute 28.1% and 71.9% (35% and 65% respectively in 2018). Most of the high-quality office projects will be on Xuhui Riverside. Built and put into use with Qiantan.
Shenzhen Qianhai new supply outbreak next year
For Shenzhen, the report expects to continue to focus on supply in the next three years and it is expected to add 5.31 million square meters. With the continuous improvement of supporting facilities, more headquarters companies will be located in Houhai to further strengthen their industrial agglomeration; in 2019, The new supply of Grade A office buildings in Qianhai will enter a concentrated outbreak period.
As for the Guangzhou market, new supply temporarily fell back in 2017, and market demand was strong to promote the Grade A office leasing business into the owner’s market. It is estimated that the new grade A office supply market will reach 2.8 million square meters in the next three years, and the stock will climb to approximately 7.7 million square meters by the end of 2020, an increase of 58.3% from the end of 2017; the Pearl River New City, Pazhou and the Financial City Business District will increase in the next three years. Supply will account for 18.0%, 54.2% and 24.7% of the total new supply in the city.