Shanghai premium office market picks up as rent discounts encourage upgrades
Occupancy rates improve, but the trend is not sustainable given an uncertain economic outlook, brokers say
Discounts attracted corporate tenants in the quarter ended September, prompting relocations from business parks and suburban areas to grade-A office buildings, the property firm said.
“As the rental disparity between grade-A and grade-B properties continued to narrow, cost-driven upgrades have become increasingly common among tenants from different industries,” said Joseph Wang, head of tenant representation for office leasing at JLL Shanghai.
Average office rent per square metre per day for premium office space in the city’s central business district dropped 5.3 per cent in the third quarter from the preceding three months to 6.6 yuan (93 US cents), JLL data showed.
The occupancy rate rose to 83.7 per cent, compared with 83.1 per cent in the second quarter.