Liu Minxia

    mllmx@msn.com

    THE stock woes that recently rocked China had a direct impact on Shenzhen’s office market, leading to only a small increase in rent as well as sluggish demand in the third quarter, a leading commercial real estate services firm said Tuesday.

    Only 23,700 square meters of Grade-A offices were rented in the third quarter of the year, and average rent for top offices in Shenzhen saw the smallest increase in two years, rising only 0.9 percent in the third quarter from a quarter earlier, as financial services companies, still the driving force of the top office market, withdrew their plans for larger offices amid a bearish market, according to Jones Lang LaSalle’s Shenzhen division.

    “Demand for top offices dropped markedly in the third quarter of the year,” said Xia Chunyi, head of the division. “Compared with previous quarters, we received fewer inquiries and saw fewer deals.”

    Despite that, the average vacancy rate dropped by 0.7 percentage points to 3.9 percent thanks to zero new supply during the quarter. But an ample supply in the last quarter of this year will push up the average vacancy rate above 10 percent and will also exert strong pressure on rent, the agency predicted.

    It was expected that 430,000 square meters of top offices will be put on the market this quarter, 80 percent of which would be in Nanshan District.

    The situation is similar in the retail property market, with no new supply last quarter, resulting a low vacancy rate but abundant supply this quarter, which will push up vacancy.

    As usual, fashion brands and eateries consumed most of the retail spaces during the third quarter of the year, resulting a 0.4-percentage-point drop to 3.2 percent in the average vacancy rate of retail properties in Shenzhen and a 0.1-percentage-point rise in rent to 953 yuan (US$150.55) per square meter per month.

    About 350,000 square meters of retail properties will be ready this quarter, with half in Futian District, and about 600,000 square meters of retail space will be ready in the coming 12 months, with nearly all in emerging shopping areas, which will result in an average vacancy rate of up to 7 percent.