Liu Minxia

    mllmx@msn.com

    AS Shenzhen further cemented its position as a financial center in South China last year, demand for top-grade offices in the city grew accordingly, with new supply and sales of such offices reaching new records.

    More than 1.3 million square meters of grade-A offices were put onto the Shenzhen market last year, with nearly 80 percent located in the city center of Futian District, a latest report by Jones Lang Lasalle’s Shenzhen office showed. The latest annual report from the Chicago-based Council on Tall Buildings and Urban Habitat also said Shenzhen, with 11 skyscrapers added to its skyline last year, completed more skyscrapers in 2016 than the United States and Australia combined.

    Financial companies are the main tenants of such high-end offices in Shenzhen, Jones Lang Lasalle found. A record of nearly 1 million square meters of grade-A offices were either rented out or used by their developers, the world’s largest private commercial real estate services company said.

    Despite that, the vacancy rate rose by nearly 3 percentage points to 12 percent due to ample supply, it said. Average rent dropped by nearly 3 percent to 260 yuan (US$37.68) per square meter per month as an adequate supply gave tenants more reasons to bargain.

    “Demand [for such offices] was sluggish in the first half of 2016,” said Xia Chunyi, director of Jones Lang Lasalle’s Shenzhen office. “Thanks to the sustained growth of traditional financial companies and stable development of the Shenzhen economy, demand returned in the second half of the year.”

    Jones Lang Lasalle also found that Shenzhen’s high-end offices are attracting investors nationwide as buyers from other parts of the country made big purchases in Shenzhen last year, which boosted prices of such offices by roughly 4 percent.

    Xia expects financial companies and high-tech companies will remain the top users of top-grade offices in the city this year, and an ample supply will continue to put pressure on rent and vacancy rate.

    Jones Lang Lasalle also found Shenzhen had a record new supply of retail properties last year. Most of the roughly 500,000 square meters of new shops last year, a 10-year record, were located in shopping centers, and Futian District alone saw three new shopping centers being put into use. Nearly 1 million square meters of new shops are expected to be ready for use this year, it said.