Why has the vacancy rate of office buildings in Beijing, Shanghai, Guangzhou, and Shenzhen increased with a maximum of over 20%
2023-07-12
As an important category of commercial real estate, office buildings are closely related to commercial activities and are places where people engaged in industries such as finance, trade, and high-tech work together. According to data from research institutions, in the first half of this year, the vacancy rates of Grade A office buildings in Beijing, Shanghai, Guangzhou, and Shenzhen were 16.9%, 18.6%, 18%, and 24.5%, respectively, with varying degrees of increase compared to the end of last year. How to view the increase in office vacancy rate? The rental rate of office buildings reflects the local economic activity over a period of time. The stronger the economic activity, the greater the demand for office buildings. The rapid growth of new business entities will drive an increase in rental rates. The effect of attracting investment and absorbing foreign investment is good, and it also has a positive impact on the rental rate of office buildings. So the changes in the rental rate of office buildings can reflect the basic situation of economic development. The demand for office building leasing varies among different industries. Taking the Beijing market as an example, a research report shows that in the first half of this year, the rental situation of office buildings in the software development and telecommunications industries was relatively stable. In the financial industry, the expansion activities of securities tenants have increased, while insurance tenants mainly focus on location and building upgrades. The upgrading, relocation, and lease expansion of state-owned enterprises in the fields of new energy and infrastructure are relatively active. Medicine and life sciences remain stable. Under favorable factors such as the recovery of consumer demand and the release of land supply after the epidemic, rental expansion in consumer services, real estate, construction and other related fields has become active. The performance varies among different regions. Taking the Beijing market as an example, the vacancy rate in the Zhongguancun office building market increased and the rent decreased in the second quarter. As a region with a relatively concentrated concentration of internet companies, the decrease in rental rates in the second quarter is closely related to some internet companies withdrawing from their leases and moving into their own properties, as well as some internet companies withdrawing or reducing their rental area. As an emerging financial industry cluster and a pilot zone for financial reform in the capital, Lize Financial and Business District has maintained a certain level of popularity, with stable rental rates and rents. Overall, the growth of office rental rates depends on the increase in economic activity. The government's policy support and financial reward policies not only help attract enterprises to land, but also promote technological innovation, industrial upgrading, and the transformation of scientific and technological achievements. They can enhance the confidence of enterprises in development and increase their demand for new and expanded leases. Among the four first tier cities, Shenzhen had the highest vacancy rate of Grade A office buildings in the first half of the year, exceeding 20%. The main reason is that Grade A office buildings in Shenzhen experienced sustained high supply in the first half of the year. The situation is similar in Guangzhou and Shanghai, with many new office building projects put into use in the first half of the year. In the case of oversupply, tenants have greater choice, and homeowners have to recruit new tenants and attract old tenants to renew their leases at lower rents. We should be vigilant against the risk of oversupply of office buildings at present. Many times, people view skyscrapers as a major achievement of economic development, believing that affluent places should have skyscrapers. Usually, the more floors a skyscraper has, the more office space it provides. If there is an oversupply of office space provided by skyscrapers, it will inevitably lead to resource waste. In urban development planning, there should be more precise planning for the construction of skyscrapers, high-rise buildings, and the supply of office buildings based on the level of industrial and economic and social development. You can pre
Edit：Hou Wenzhe Responsible editor：WeiZe
Source：economic daily
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