Affected by the epidemic this year, office buildings and shops in first-tier cities are under overall pressure, and rising vacancy rates and declining rents have become market trends.
What is the current situation in Shanghai’s office leasing market? Is there a tendency for rent levels to pick up? The reporter recently visited some office buildings in Shanghai to understand the situation.
The reporter followed the real estate agency and first came to the office buildings in the North Bund area of Hongkou District, Shanghai, which is located on the bank of the Huangpu River and is full of old and new office buildings. Under the leadership of the intermediary, the reporter came to an office building that has been in business for three years and has a good overall environment. The rental area of each floor is 2,700 square meters. The reporter and his party looked at the area of more than 600 square meters on the 19th and 32nd floors. Rental units.
In another office building nearby, the 37th floor that the reporter was shown for renting out the entire floor was vacant. Most of the 50th floor was also vacant. The 15th floor hardcovered office with more than 460 square meters was also open for lease. The intermediary revealed that the overall vacancy rate of this office building is currently around 40%. In the core office sector in Xuhui District, Shanghai, relatively few office buildings are rented out.
A staff member of a real estate agency in Shanghai: The vacancy rate in downtowns like Jing’an, Huangpu, and Xuhui is relatively low, around 10%, the vacancy rate in the North Bund is 30%, and the vacancy rate in Qiantan and Dahongqiao is nearly 40%. There are 100 houses in a building, and it will have 40 empty houses.
Reporter: Why are there so many empty houses?
Staff of a real estate agency in Shanghai: Because there are so many new buildings.
During the reporter’s visit, the real estate agency said that this year is different from previous years. Due to the epidemic, many office buildings are not easy to rent. Some floors of an office building she is responsible for are now quoted at more than nine yuan per square meter per day, which is higher than last year. It is about one yuan lower, and there is still room for negotiation in the current offer.
A staff member of a real estate agency in Shanghai: Nowadays, big landlords are a little bit easier to talk about rent than before. In previous years, the fluctuations discussed here were actually not big.
The intermediary said that even if the price of some real estate is not much room for negotiation, the rent-free period can be extended appropriately, which is equivalent to reducing the rent in disguise.
Data show that in the third quarter of this year, the volume of new office buildings in Shanghai totaled 371,000 square meters, and at the same time, the net absorption also recovered to 216,000 square meters. At the same time, in the third quarter of this year, the vacancy rate of high-quality office buildings in Shanghai was 20.4%, an increase of 0.5% compared to the second quarter. In addition, office rents in Shanghai continued to fall this year. In the third quarter, rents fell by 1% compared to the second quarter, but the decline has narrowed.
Dong Hao, chief analyst of Crane Securities: The demand side is not recovering as fast as the overall supply. Therefore, the overall rent side is still under pressure. We think the supply and demand of office buildings may come next year. More obvious rebound.