In 2021, the Shanghai office market experienced a strong recovery. Thanks to the superposition of new supply and strong demand, the net absorption of office buildings in Shanghai was 1.3 million square meters, a strong increase of 160% year-on-year in 2020, and the vacancy rate fell to 16.6%.
Shanghai: office leasing has recovered significantly
vacancy rate reduced to 16.6%
Shanghai Lujiazui Finance & Trade Zone Development Co.Ltd(600663) is the core functional area of Shanghai international financial center. Taikang Insurance Building is a Class A office building of Shanghai Lujiazui Finance & Trade Zone Development Co.Ltd(600663) , with 41 floors. The surrounding office buildings are crowded and the business is prosperous. The person in charge said that the building began operation around 2019. Affected by the epidemic, the rental rate in the first two years was not ideal, but the market improved significantly in 2021. At present, the rental rate has reached 92% .
The person in charge told reporters that the tenants of the building are mainly financial enterprises, accounting for about 60%. With the improvement of the market, rent has increased slightly since the beginning of last year. At present, the average rent is about 11 yuan per square meter per day. A fund company located on the 17th floor of the building has doubled the area on the original basis.
Li surong, general manager of Shanghai Branch of a fund company: some new departments are also set up in Shanghai and the new talent policy of Shanghai municipal government. Many overseas returnees will join our company. Our current floor is about 625 square meters. We also want to expand the same area in the near future. Now we have basically implemented about the same area on the other 19 floors.
The obvious warming of rental rate is common in the whole Shanghai Lujiazui Finance & Trade Zone Development Co.Ltd(600663) region. So far, Shanghai Lujiazui Finance & Trade Zone Development Co.Ltd(600663) area has 285 office buildings and about 13000 office enterprises. At present, the average rental rate is 90.3% . For example, in the well-known “three piece set”, the rental rates of the global financial center and Jinmao building have reached more than 95%, while the national financial center has been in a full rent state.
In 2021, thanks to the superposition of new supply and strong demand, the net absorption of office buildings in Shanghai was 1.3 million square meters, a strong increase of 160% year-on-year in 2020, and the vacancy rate fell to 16.6%. In terms of rent, the rent increased by about 1.1% in 2021, the first increase in office rent in Shanghai in recent five years .
Shanghai: strong demand for office rental in emerging industries
mapping the transformation and upgrading of industrial structure
Not only the core business district, but also the emerging business district and business park have also recovered significantly. In 2021, the rent increase of Shanghai Business Park reached a new high since 2019, and the vacancy rate was lower than the city’s average level .
Yang Yan is an intermediary service officer of the office business. He pointed to a office in Xintiandi District, telling reporters that the rental situation of the building is very good.
Yang Yan, manager of Hengfeng Road store, an office building intermediary in Shanghai: 90% had been rented by September 2021, and it had been rented out by the end of the year. When I asked two days ago, the model houses were rented out. The model houses were 16 yuan per square meter per day, and they were rented out at a high price.
Yang Yan told reporters that in addition to Xintiandi and some office buildings in Daning area, foreshore as the most popular new business district is the best rental demand area at present, the vacancy rate is only 2%, basically a room is hard to find . In terms of rent, the rent of various office buildings in Shanghai, including core business district, emerging business district and business park, ranges from 45 yuan to 20 yuan.
Chen Baohai, asset management director of a real estate service organization in Shanghai: the average rent of the whole is 7 yuan per square meter per day, the higher areas may be about 20 yuan, the lower ones are about 45 yuan, and the main core areas are generally about 10 yuan per square meter per day.
On the other side of the Huangpu River, the person in charge of a 1000 person medical artificial intelligence enterprise in Zhangjiang, Pudong, where the industrial park is gathered, told reporters that at present, the rent is more than 5 yuan per square meter per day. The company has just expanded the first floor office area in March 2021, but the demand is still increasing due to the rapid expansion speed.
Ma Handong, head of a medical artificial intelligence enterprise in Shanghai: because we expanded faster, we are now full again. Now we are going to negotiate with the park whether we can get another floor. In fact, it is still difficult to find an office, because the whole high-tech enterprises in Zhangjiang expand relatively fast.
Science and technology enterprises like this are one of the main forces of office building leasing in Shanghai in 2021. In terms of industry, among the new office rental demand in Shanghai in 2021, the demand of TMT industry dominated by e-commerce, social media, artificial intelligence and big data reached 26%, surpassing finance and accounting for the first; Financial accounting for 19%; Followed by consumer goods manufacturing and pharmaceutical enterprises. It reflects the continuous upgrading of Shanghai’s industrial structure, and a number of emerging enterprises have become a new engine of Shanghai’s economic growth.
