Three new Grade A office projects were launched in Guangzhou in Q1, which brought a total number of 210 thousand-sqm new office space supply. The total supply of Grade A office space increased 3.5 percent QoQ to more than 6.2 million sqm by the end of Q1 in Guangzhou, according to Savills, a UK-based property consulting company.
The overall performance of Guangzhou's grade A office leasing market was relatively flat in Q1. Pazhou recorded the greatest rental demand with net absorption of 54 thousand square meters.
The city's average vacancy rate has exceeded 10 percent for the first time since Q3 in 2017 to 11.8 percent, up 2.3 percent QoQ. Finance, information technology, manufacturing enterprises are the main sources of the rental demand.
According to the report, some property owners in Zhujiang New Town chose to lower rents to attract tenants in Q1. The city’s average office rent index decreased 0.1 percent, down 1.6 percent YoY.
It’s anticipated that three new Grade A office projects will enter the market in Q2 2022 and bring a total number of 154 thousand sqm new office space supply. The rental demand for office space in Pazhou will continue to grow this year. The demand from financial companies, local Internet companies and technological companies will further increase.
Although there will be growing demand, the average vacancy rate is expected to increase while the average rent will decrease considering a large amount of new supply.
Author: Jasmine, Jiang Chang (intern)
Editor: Wing, Olivia, Jerry