DTZ Debenham Tie Leung expects the grade A office market in Shanghai to see more than 20 per cent rental growth this year following rapid expansion of overseas corporations.
DTZ said prime office rentals in many cities, including Shanghai, Beijing and Guangzhou, continued to rise for the fifth consecutive quarter, with Shanghai the best performer. Rentals in Shanghai have surged 13 per cent in the first quarter while in Beijing and Guangzhou they rose 10 per cent, DTZ said.
Executive director Alexander Lam said many foreign companies were continuing to expand in Shanghai in anticipation of entry to the World Trade Organisation.
Take-up of grade A space in the first quarter was 1,776,093 square feet, a 52 per cent jump from the end of last year.
Office rentals in Lujiazui rose to an average of HK$14.5 per square foot while occupancy was more than 80 per cent.
However, vacancy rates in Puxi rose to 18.4 per cent from 15.8 per cent due to the completion of two buildings in Nanjing Road West and Hongqiao District.
