The first report on the grade A office space in the Guangdong-Hong Kong-Macao Greater Bay Area(GBA) was recently released by Savills, a real estate service provider headquartered in the UK, with the aim to give investors and enterprises insights into trends in the area’s high end office space market.
The company collected data from Hong Kong SAR, Guangzhou and Shenzhen as well as data of the seven other cities in Guangdong from 2009 and 2013 based on the development of each city. Macao is not included in this report.
According to the report, rental rates in the GBA is growing steadily and increased 2.4 percent compared to last year by the end of June 2019 while retail prices of grade A office space slightly decreased 0.5 percent year on year over the same period.
The cost for a grade A office in Hong Kong tops the GBA with an average rent of 879.8 yuan per sqm per month. Ranking second and third respectively, Shenzhen and Guanzhou are close in terms of cost, with their average rent respectively 244.8 yuan per sqm per month and 210.8 yuan per sqm per month.
In spite of the high costs, Hong Kong, Shenzhen and Guangzhou are still the top choices in the GBA. Zhuhai and Foshan are very much showing the signs of being a tenant’s market right now, with high vacancy rates and negotiable prices. As the transportation network is becoming more sophisticated, the two cities are expected to become the favoured choice for more and more enterprises.
Xie Jingyu, Director of Savills’ Research Department South China, said many GBA cities have entered a so-called ‘temporary conditioning period’ with the pace of their rental growth slowing during the first half of 2019. But from the perspective of economic growth and policy support, the average rent and retail price of grade A offices are anticipated to increase steadily over the long term.
“In the next six months, the rent in Guangzhou and Dongguan is expected to maintain a downward trend but the decrease will be limited in Guangzhou,” he said, “the Shenzhen, Zhuhai and Foshan markets are expected to warm up. And with policy support, the rent in Shenzhen is likely to grow in the short run, showing opportunity for investment.”
In addition, Lin Muxiong, Chairman of Savills South China, added that the gap in rental rates across the GBA cities is expected to narrow as the transportation network develops and resource allocation is optimized. It will be a vital opportunity for most cities in the GBA.”
Reported by Jasmine Yin
Edited by Olivia Ouyang, Simon Haywood