Thanks to recovering exports, exported-oriented firms' demand for storage space in Shenzhen's free trade zone (FTZ) areas has been on the rise in the second quarter of the year, leading to a surge in rent prices for such warehouses, according to a report released Thursday by Jones Lang LaSalle's Shenzhen division.
Average rent for warehouses in the free trade zone areas rose by 2 percent to 34.8 yuan (US$31) per square meter per month in the second quarter, after the city's exports saw its first rise in May in five months, the report said.
Shenzhen's exports rose 2.2 percent from a year ago, bringing the total exports in April and May to US$42.5 billion. Property owners in the Yantian, Bao'an and Qianhai areas, who expect exports to rise in the remainder of the year, have hiked rent back up to levels seen a year ago. The vacancy rate of such warehouses didn't change much from a quarter earlier, at 19.6 percent, while the vacancy rate of warehouses in non-free trade zone areas is still high, at 25.3 percent, according to the report.
Rent for warehouses in Longgang District rose to 30 yuan per square meter per month in the second quarter, resulting in a 1.8 percent rise in the average rent for warehouses in all non-free trade zone areas.
Meanwhile, preferential policies offered by the Qianhai economic zone and the resumption of initial public offerings have stirred up Shenzhen's financial sector's demand for grade-A offices in the city's central business district (CBD) in the second quarter, resulting in a 1-percentage-point drop in the vacancy rate.
Another sign of the sector's resurgence is that the average monthly rent for offices in Shenzhen rose 3.2 percent to 199 yuan per square meter per month in the second quarter because of a strong surge in rent for Grade-A offices in Futian District, the report said. The increase was the largest in six straight quarters, since the second quarter of last year among major Chinese cities, the report said.
Xia Chunyi, general manager of Jones Lang LaSalle's Shenzhen division, expects the vacancy rate of the top-grade offices for the year to drop 9 to 10 percent from a year ago, while rent should slip 8 to 10 percent from a year ago.