Savills Research Department Director Xie Jingyu said that an increasing number of overseas and domestic investors are looking for property projects in Guangzhou after the release of the Guangdong-Hong Kong-Macao Greater Bay Area development plan.
“We saw European enterprises at the auto sector and the chemical sector seeking office rental projects in Guangzhou and considering to settle their South China headquarters here,” said Xie who added that domestic demand for space is also increasing. Most businesses prefer the capital city Guangzhou instead of Shenzhen, seeking to either expand their offices or land new projects, according to Xie.
According to the report, a number of domestic giants rapidly absorbed Grade A office space in Pazhou. Most enterprises are in the fields of Fintech, Finance and TMT (Technology, Media, Telecom), and the largest rental area of their projects could go up to over 20,000 square meters. As a result, the vacancy rate of Pazhou dropped 5.1 percent quarter on quarter to 3.6 percent, which is much faster than expected. Detailed data of different business areas in Q2 are as follows:
Savills said that Guangzhou’s average annual net absorption of Grade A office space will increase five percent from 2019 to 2023 compared to the last five years, to 452,000 square meters, while the new supply will reach 3.4 million square meters in the same period. Due to sufficient new supply, Guangzhou’s vacancy rate is expected to increase and the rent to maintain stable until 2023, according to local officials.
The development of the GBA and related advantageous policies to attract talent also contributed to the active demand in the city’s retail and residential markets. The average rent for first floor city-wide shopping malls increased 1.7 percent to 753 yuan per square meter per month.
The average rent in Guangzhou’s CBD and secondary areas respectively rose 1.7 percent and 1.4 percent to 1,647 yuan and 434 yuan per square meter per month. The supply in Guangzhou’s residential sales market fell 29 percent to 1.3 million square meters in Q2 while transaction volume rose 16.5 percent to 2.06 million square meters. The average transaction prize has increased 25.3 percent to 28,937 yuan per square meter.
Reported by Jasmine
Edited by Olivia, Chris