(Yicai Global) Dec. 17 -- The average vacancy rate at office buildings in Beijing, Shanghai, Guangzhou and Shenzhen, China's four traditional first-tier cities, have risen to almost decade-high levels this year.
The average among the four was around 10 percent during the first three quarters, 21st Century Business Herald reported, citing data from real estate services firm Cushman & Wakefield. The individual figures rose an average 2.5 percent in Beijing (13.8 percent), Shanghai (12.5 percent) and Shenzhen (21.2 percent), according to data from 58.Com's property data arm Anjuke, while Guangzhou clipped its rate down to just 3.7 percent.
Stricter supervision of peer-to-peer lending has crippled Shenzhen as swathes of financial companies went out of business while the city added new supplies, said Zhang Bo, chief analyst at the 58 Anjuke Institute. As a result, monthly rents in the city dived 3.7 percent to CNY233 (USD33.29) per square meter at the end of September. Shanghai rates also slipped 1.6 percent to CNY310, while those in Beijing rose 2.5 percent to CNY389.
Lower rents and limited new supplies helped keep the vacancy rate down in Guangzhou, Zhang added. Monthly rates there climbed 1.1 percent to CNY178 a square meter.
On the whole, 25 percent of office buildings in first-tier cities have risen this quarter while the remainder have fallen, according to the China Index Academy.
The average vacancy rate in second-tier cities was about 28 percent, 21st Century Business Herald added, citing Cushman & Wakefield data. Half of office buildings in these cities have become more expensive to rent in the final quarter of 2019, the China Index Academy said, while 40.9 percent have declined and the remainder stayed basically unchanged.
China's changing economic structure and industry adjustments are the main cause of rising vacancies, several sources at other institutions said. Steady increases in supply have also had an impact and there will likely be a surplus of offices for quite some time, they added.
Editor: James Boynton