Office rents rise in Shenzhen, Xiamen and Beijing, index shows

Shenzhen retained its crown as the Chinese city with the highest growth in office rentals in the third quarter, fuelled by strong demand from enterprises for its Qianhai economic zone, the SCMP-DTZ mainland office rental index shows.

The quarterly index, issued by the South China Morning Post and property consultancy DTZ, reports office rental performance in 16 cities in China. First issued in July, the index was developed with a base value of 100 for the first quarter of last year.

Shenzhen recorded the highest overall increase in rents in the third quarter, up 5.6 per cent from the previous quarter, with Qianhai providing a strong stimulus for its economy. The city also ranked first in the second quarter with a gain of 5.7 per cent.

"Strong demand from enterprises seeking to register in Qianhai and the lack of new supply for the past three consecutive quarters acted to strongly stimulate the city's leasing market," said Andrew Ness, head of Northern Asia research at DTZ.

The buoyant demand for office space and sharp upward movement in office rents had forced some more cost-sensitive occupiers to relocate to non-grade-A offices or business parks, he said.

Xiamen also performed well during the third quarter, with growth of 2 per cent as the tertiary sector, comprising mostly finance and logistics, was active in taking space across different submarkets in the city. No new supply was recorded during the period surveyed.