Strong demand from domestic and multinational corporations in the professional services, banking and financial sectors has driven the growth of office leasing in Nanjing, say leading mainland-based real estate consultants.
In the second quarter of this year, net take-up of office space rose 28 per cent, year-on-year, to 64,500 square metres, says Kevin Chan, national director of markets at Jones Lang LaSalle Shanghai.
According to Chan, the average monthly effective rent for grade-A offices in the second quarter gained 2 per cent to 111.7 yuan (HK$136) per square metre. 'While domestic companies remain the dominant players in the leasing market, take-up by multinational companies is getting stronger,' he says. 'Professional services, real estate, chemistry, financial and manufacturing corporations are particularly active in the leasing market.'
The vacancy rate in Nanjing's overall office leasing market fell 2.2 percentage points to 16.7 per cent in the second quarter, notes Lina Wong, managing director of east and southeast China at Colliers International in Shanghai.
Nanjing's grade-A offices are in four key districts: Xuanwu, Gulou, Baixia and Jianye. The city's central business district (CBD) Xinjiekou is located in Baixia. The Hexi area in Jianye is the city's new CBD planned by the government. Xinjiekou is known for its financial services and accounts for 44 per cent of Nanjing's high-quality office supply, Wong says. Premium grade-A office towers in Nanjing include the Nanjing Greenland Financial Center (also known as the Greenland Square Zifeng Tower), Nanjing International Finance Center and Nanjing City Center. 'The average monthly rent of these buildings ranges from 137 to 167 yuan per square metre,' Wong says.
Office rental is expected to continue upwards as more multinational corporations are setting up office in Nanjing.
'The occupancy rate at grade-A office buildings is likely to remain at the current level of between 80 and 85 per cent for the remainder of the year,' Wong adds. The Siya Wealth Tower in Xinjiekou is expected to open next year, adding about 47,000 square metres of supply, she says.
Another skyscraper under construction is the Nanjing International Commerce Centre (ICC) developed by Sun Hung Kai Properties (SHKP). Nanjing ICC is located in the new CBD in Hexi, close to the Nanjing Central Park.
According to SHKP, the Nanjing ICC complex includes a 290-metre office and hotel tower, two other office towers and a shopping centre, and a landscaped plaza connected to the Yuan Tong interchange station of Metro lines 1 and 2, and a large conference centre. Total gross floor area of Nanjing ICC is 370,000 square metres.
'Nanjing ICC is a major project. We are committed to delivering the finest projects and service to promote the development of the city,' says Ted Tang, director of Sun Hung Kai Development (China).