Liu Minxia

    mllmx@msn.com

    A RECORD number of newly registered companies in Shenzhen, especially in the special economic zone of Qianhai, have led to an increasing demand for top-grade offices in the city in the first quarter of the year, driving up rent to a level that may exceed top-grade offices in Shanghai soon, according to Jones Lang LaSalle’s Shenzhen branch.

    More than 25,000 companies have been established in Qianhai, 5,000 more than at the end of last year, which has greatly driven up the demand for offices of all grades across the city, according to a report by Jones Lang LaSalle’s Shenzhen branch.

    Meanwhile, drawn by Qianhai’s prospects, domestic and foreign companies are vying to expand in Shenzhen, and their demand for offices is often astonishing, said Xia Chunyi, director and general manager of Jones Lang LaSalle’s Shenzhen branch.

    “As far as we know, at least six domestic financial institutions are looking for top-grade offices with a total area exceeding 20,000 square meters,” Xia told reporters Thursday.

    As a result, 108,600 square meters of grade-A office space was rented in the first quarter of the year, compared with the 450,000 square meters rented in the whole of last year. Average rent prices rose accordingly, by 4.7 percent from a year ago to 256 yuan (US$42) per square meter. It was the ninth consecutive quarter that the city’s average rent for grade-A offices increased.

    The average rent for top-grade offices in Shenzhen’s Futian CBD increased by 6 percent in the first quarter to 273 yuan per square meter from a year ago, compared with about 280 yuan per square meter for top-grade offices in Shanghai’s CBD areas.

    “It may not take long for rent for Futian’s grade-A offices to exceed that in Shanghai’s CBD area,” said Zeng Li, director of the research department with Jones Lang LaSalle’s South China division.

    The rising demand, however, didn’t drive down vacancies thanks to an ample supply of such offices. With 3.33 million square meters of grade-A office space available on the market, the average vacancy rate surged to 6.7 percent from 3 percent a year ago, the report said.

    In addition to Qianhai-registered firms, other businesses, especially those from the IT and financial sectors, also showed stronger demand for top-grade offices in Shenzhen, the report said.

    As more companies are expected to set up in Qianhai later this year, the demand for grade-A offices in Shenzhen will continue to grow, the leading global commercial real estate services firm predicted. The average rent for grade-A office space will continue to rise by 12 to 14 percent in the remaining part of the year, but the vacancy rate won’t drop below 9 percent due to ample supply, the report said.