According to the latest report released by Knight Frank, in the third quarter of 2011, despite uncertainties over the global economy, positive outlook for China’s economic growth lifted demand for quality offices in Beijing. With both international and local corporations continuing with their expansion plans in the city and more tenants opting to acquire their offices, rents and prices of Grade-A offices in Beijing, Shanghai and Guangzhou are pushed up.
In the third quarter, prices of Beijing Grade-A offices rose 6.7% quarter on quarter and rents surged 9.0% per month. Tightening policies on commercial properties were launched for the first time in Shanghai in this quarter. Although restrictions were imposed on the purchases of commercial properties, investors’ interest in them remained strong, amid stricter measures being imposed on the residential market. In Guangzhou market, against a backdrop of inflation and increasing restrictions on home purchases, office properties were sought after by investors in Guangzhou. Office sales transactions and prices grew significantly quarter on quarter.
Mr Thomas Lam Ho Man, Head of Research at Knight Frank in Greater China says “looking forward, with uncertainties over the global economy and credit tightening in Mainland China, we expect rents to experience mild growth, while prices are expected to remain stable in Guangzhou. However, with a rise in the overall quality of Guangzhou’s offices, along with the completions of premium buildings in Pearl River New City, office rents are expected to grow further. Although China’s economic growth may slow down, it will remain the world’s most robust market. Beijing will continue to attract international and local corporations looking to establish, expand or upgrade their offices in the city. As Grade-A office supply in Beijing will remain limited until 2014, the uptrend in rents is expected to continue. Besides, sales and leasing demand for Shanghai’s Grade-A offices is also set to remain robust, while both prices and rents will continue on an uptrend.”