INTERNATIONAL tenants in Shanghai are beginning to resist the high rentals of grade A offices and are looking for bargains, say property consultants at Jones Lang Wootton. They said tenants were opting to move into refurbished buildings and buildings in secondary locations. They said the trend was a temporary one, lasting perhaps two years, because more grade A office space was due to come on stream by the middle of next year. The consultancy's managing director in Shanghai, Albert Lau Tak-yeung, said the general move by multinationals to downgrade their accommodation to grade B office premises was because tenants wanted more space and needed to cut costs. Mr Lau said companies would follow suit if they saw others move into refurbished buildings and buildings in secondary locations. He said rentals for these buildings were about half that charged for grade A offices in the city areas. The grade B buildings were in districts including Xujiahui, Hongqiao and Yangpu. One such building was the Dong Hai Square, converted from an industrial building. Mr Lau said the lack of expansion space in the Grade A office premises forced existing tenants to look elsewhere. He said tenants in the A grade Shanghai Centre had to move out when they wanted to expand their businesses - it had been designed for small-sized offices. Rents at the Shanghai Centre had increased by about 200 per cent in the past three years and inner city rents generally have climbed 65 per cent in the same period. The consultants estimated that 3.7 million square metres of grade A supply was planned for completion in the Pudong and Puxi areas by the end of 1998, with the bulk of supply due over the next two years.