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Shanghai's office rents may moderate

01-11-2012 17:06 BJT

GROWTH in rents in Shanghai's Grade A office market may moderate in 2012, extending an uptrend despite increasing uncertainties in the global economy, major international real estate services providers said yesterday.

The average rent of Grade A office buildings in the city may climb by between 5 percent and 12.5 percent on an annual basis this year, according to latest forecasts by Jones Lang LaSalle and Savills.

"The limited supply in the city's core central business district areas over the next 12 months will give landlords bargaining power and the ability to maintain moderate rental growth during 2012, likely between 5 and 10 percent annually," said Anthony Couse, managing director of Jones Lang LaSalle Shanghai.

"Self-use purchasers will continue to absorb much of the new supply in the pipeline in Pudong while supply will be limited in Puxi before the premium Grade A Jing'an Kerry Center is finished in the third quarter," he said.

But Savills projected a more positive outlook, saying that Grade A office rents may rise 12.5 percent this year due to strong demand from tenants.

It also forecast that new local supply may total 650,000 square meters on both sides of the Huangpu River.

Last year, Grade A office rents rose 11 percent from a year earlier in Shanghai to an average 7.50 yuan (US$1.19) per square meter per day, Savills data showed.

Editor:Zhang Hao |Source: People’s Daily

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