[photopress:shanghaiofficebuildings.jpg,full,alignright]According to Tie Leung at DTZ Debenham strong demand from multinational companies in the service sector dragged vacancy rate of Shanghai’s grade-A office buildings to a 10-year low last year. The vacancy rate of grade-A office towers in prime locations in Shanghai was down to 3% last year according to DTZ, a real estate service company, in its latest industry report.
An example of the demand: the second phase of Plaza 66 on Nanjing West Road that will be completed in the first quarter and has already recorded a pre-leasing rate of around 70%. Companies have opted for medium to large size office space in the tower.
Analysts also attributed the low vacancy rate to limited supply as there were only 225,000 square meters of new supply last year against an added 450,000 square meters in 2005.
The demand is such that companies are getting in early. Park Place, an office tower that will not be operational until the end of the year, has pre-leased 35% of its space to date.
This low vacancy rate coupled with continued demand is pushing overall average rentals higher thoughout the city. The average asking rent in the city is now US$1 per square meter per day, a 15% increase over 2005.
Source: Shanghai Daily