Shanghai is turning out to be the next giant market in commercial real estate domain.
The business hub and professional service enterprises are on their way to rushing out the demand of commercial buildings for offices purpose in the central business district of shanghai for the period of Q3 2014 and the growth is anticipated to rise throughout the year, reported by global real estate services provider on recent past Tuesday.
According to LaSalle research, Chinese first-tier cities mainly referred as “Big 4” are the mainstream spots for executing the Grade A and utmost projects, whereas the second-tier cities that includes Wuhan, Xiamen, Tianjin, Chengdu and Chongqing have been considered as prominent cities where the growth of commercial real estate is flourishing at descent pace as a result of service industry revolution and economic reforms.
Shanghai is the leading city having substantial share of esteemed office buildings demand, due to robust development of financial services industry in china. The industry also played an important role in resurrecting the CBD leasing market.
The national insurance company published that facts that depicts up to 5000 square meters exclusively in Shanghai World Financial Center, which is most eye-catching destination for office building in entire city, for the period.
The report also casted that the demand has also increased for companies affiliated with offering new form of financial services.
"We are seeing growing demand from new types of financial service firms, such as Internet finance companies," expressed Anthony Couse, managing director for Jones Lang LaSalle East China.
Moreover, the local internet based finance company also leased 640 square meters in Hong Jia Tower for constructing their Shanghai office. On the other hand, Grandall Law firm released two floors in garden square in the city.
Around the premises of Pudong New Area, shanghai, the average rents for A-grade projects increased by 1.7% quarterly with 10 yuan ($1.63) per square meters day by day. Whereas the Premium A-Grade project divulged rise in rents by 1.2 percent quarterly and to 11.4 yuan per square meters day by day.
However, the rents in Premium A-grade office buildings market Puxi area continued to fall in third quarter with 1.4 percent quarterly and 10.1 Yuan per square meters day by day, because the owners are desperate to provide discounts to get and retain first-class tenants in their buildings. The Grade A projects rents in same locality also plunged by 0.44 percent quarterly and 8.8 yuan per square meters day by day on account of similar reasons, stated in report.
The concentrated demand of strata-titled office for both personal use and investment purposes are constantly rushing forward and raise the sales volume during the quarter. The total transaction volume occurred at the end of third quarter grew by 29.4 percent as compared to the same period in past year.
JLL report also depicts that, "With more deals under negotiation, this year we could see the market achieve its highest annual transaction volume in several years,"
Shenzhen and Chongqing are among those first and second-tier cities that pose substantial raise in the demand of A-Grade commercial buildings.
The average rents in Grade-A office leasing come to pass in Shenzhen soared to 1.5 percent quarter-on-quarter to 201 yuan per sq m per month during the third quarter, as suggested by Cushman & Wakefield, a private real estate services company.