Limited supply sees rent rise

Rapid expansion by domestic corporations in the finance sector, coupled with the limited supply of grade-A offices, has contributed to rent increases and a decline in vacancies in the commercial property leasing market.

Managing director of Jones Lang LaSalle, Shenyang, Michael Wang, says, grade-A office absorption and transaction rents showed positive quarter-on-quarter growth in the third quarter of this year.

'The average vacancy rate in the market went down to 15.5 per cent, which represented a 5.7 per cent decline from the second quarter,' he says.

Grade-A office rents showed strong momentum for growth. The average monthly rent of the city's grade-A offices was recorded at 92.4 yuan per square metre (based on the net effective rent, gross floor area) in the third quarter.

'It was a 4.2 per cent quarter-on-quarter increase. Compared with the same time in 2010, the increase was 29 per cent,' Wang says.

He attributes the gain in rent to the limited availability of new grade-A office space in the city as well as the strong demand from domestic companies in the financial sector.