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China’s financial hub of Shanghai saw vacancy rate of grade-A office buildings reached 18.59% at the end of June, rising by 1.28 percentage points from the first quarter, and the average rent was 8.05 yuan per square meter per day, falling by 0.8%, according to commercial real estate service company Cushman & Wakefield.
The vacancy rate in non-CBD areas in Shanghai’s Pudong district rose by the most, up 6.6 percentage points in the period, while the rent in Pudong’s CDB area and non-CBD area in Puxi fell the most, down 2.4% and 2.3%, respectively, according to the data.
The rising vacancy and falling rents came amid increasing supply of office space. In the first half of the year, Shanghai saw seven new projects enter the market with a total of 529,000 square meters, surging 264.9% from a year ago, and the net absorption was 219,000 square meters, slumping 31.6% from a year earlier, according to CBRE Group.
In the second half of the year, Shanghai is expected to see about 953,000 square meters of new office supply, marking the highest in nearly ten years, estimates CBRE, while Cushman & Wakefield expects Shanghai to see nearly 1.4 million squarer meters of new office supply in 2024.