Savills: Shanghai’s Grade A office market net absorption doubles year-on-year in 2021 – Xinhua English.news.cn

recently,First PacificDavis held the annual real estate market review and outlook exchange meeting in Shanghai.according toFirst PacificDavis reported that in the fourth quarter of 2021, the Shanghai Grade A office market achieved a net absorption of 405,000 square meters, an increase of 18% from the previous quarter. The annual net absorption amounted to 1.36 million square meters, doubling year-on-year and close to the historical peak in 2015. Although the supply is still large throughout the year, the market situation of oversupply in 2016-2020 will be temporarily relieved in 2021 due to strong demand. In the fourth quarter, the city’s average vacancy rate of Grade A office buildings rose by 1.1 percentage points month-on-month to 14.2%, down 2.6 percentage points year-on-year.

　　First PacificDavis said that for the whole year of 2021, the proportion of demand in the medical and health care, media and entertainment industries has increased significantly, accounting for 10% and 22%, respectively, compared with only 5% and 4% in 2020. Healthcare companies usually have relatively ample budgets, so they prefer high-quality projects in hotspot areas as their main office locations. During the year, nearly 75% of the medical and health care companies were located on Nanjing West Road, Qiantan and Huaihai Middle Road. The location of media and entertainment companies is more dispersed.

In the fourth quarter of 2021, the Shanghai Grade A office rent index rose by 0.8% qoq to RMB 7.4 per square meter per day. Grade A office rents rose by 1.8% for the year, with the submarkets increasing by 1.1% (central business district), 1.6% (secondary business district), and 2.8% (non-core business district).

(Article source: ChinasecuritiesReport · China Securities Network)

Article source: China Securities Journal China Securities Network

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Original title: Savills: Shanghai Grade A office market net absorption doubles year-on-year in 2021