Shenzhen’s office landlords offer leisure areas, huge pantries as they compete to woo tech firms amid record vacancy levels

Landlords of premium office space in Shenzhen are having to go beyond cutting rents to lure tenants, providing customised facilities flexible arrangements to attract the fast-expanding tech firms as vacancy reached a record in the special economic zone.

There was close to 2.4 million square metres of empty space – about 13 times the gross floor area of Hong Kong’s IFC towers – in Shenzhen in the third quarter, according to CBRE, while JLL said the vacancy rate stood at a record 27.8 per cent in October.

“We see companies from the sectors of technology, media and telecom as ‘new-economy’ firms”. With the outbreak of Covid-19, there has been higher demand for the services provided by these new-economy firms and we are seeing these firms account for about 60 per cent of the new office leasing in Shenzhen,” said Martin Wong, head of research at Knight Frank.

New-economy enterprises have each been taking up between about 10,000 sq m and 100,000 sq m (107,640 sq ft to 1.07 million sq ft) of office space so far this year, said Jex Ng, managing director for South China at JLL.

They need larger spaces because they provide employees, who often work more than 12 hours a day, with entertainment and leisure areas, and spacious pantries.

“Owners who wish to attract new-economy companies should consider providing facilities that can stimulate the creativity of employees and provide catering services in the work space,” said Ng.

He said landlords also needed to adapt to the greater flexibility in leasing terms often demanded by their new-economy tenants.