Liu Minxia

    mllmx@msn.com

    THE incoming Shenzhen-Hong Kong stock connect program is pushing up demand for top-grade offices in Shenzhen but an ample supply in the past quarter has led to a higher vacancy rate in these offices, the Shenzhen office of international real estate agency Jones Lang LaSalle said Friday.

    To vie for a slice of the Shenzhen-Hong Kong stock connect program, which is expected to be rolled out before the year-end, a growing number of traditional financial services companies including banks and brokerages are establishing outlets in Shenzhen, resulting in an obvious increase in both enquiries and renting of grade-A offices in the city, said Xia Chunyi, director and general manager of Jones Lang LaSalle’s Shenzhen branch.

    A steady growth in Shenzhen’s economy has also ensured demand for offices, Xia said. In the first half of the year, Shenzhen’s GDP rose by 8.6 percent from a year ago, and 30 percent more new companies were registered in the first three quarters of the year than a year earlier.

    Despite the growing demand, an ample supply of grade-A offices in the third quarter of 2016 has pushed up vacancy rates by 15.8 percent compared with a quarter earlier.

    “Shenzhen saw five grade-A office buildings being completed in the third quarter of the year, including three in Futian CBD, one in the Houhai area in Nanshan District and another one in Qianhai,” said Xia.

    “With a new supply of 470,000 square meters of top-grade offices in the past quarter, Shenzhen’s grade-A offices totaled 4.7 million square meters by the end of the third quarter.”

    Futian District remained the top choice of financial services companies, but high-tech companies tend to relocate outside Futian to cut rent costs, Xia said.

    The relocation trend has dragged down the average rent by 1 percent, according to Xia. In the past quarter, 300,000 square meters of grade-A office were rented.

    In the fourth quarter, 600,000 square meters of grade-A offices are expected to be made available to the market, while in the coming 12 months, more than 1 million square meters of such offices will be ready for use, which is expected to push the vacancy rate beyond 20 percent, Xia said.