Shangai office rents to rise 6 pct in the next three years
Knight Frank forecasts in 2015-2018 (year-end), eight out of the 20 global cities are expected to see double digit growth in office rents, with Madrid recording top rental growth at 22.2% by 2018, followed closely by Mumbai (21.3%). Shanghai and Beijing are expected to record 6.1% and 1.8% rental growths.
Peter Zhang, Director and Head of Commercial Services, Tenant Representation at Knight Frank Shanghai, indicates, as the completion date of some Shanghai office projects have been delayed, overall office rent has increased by 5.5% year on year in Q3 2015. CBD has seen fast rental growth in Q3 2015 with Little Lujiazui increasing by 11% year on year. We expect the average office rent will face downward pressure with abundant new supply in the emerging business districts.
Between 2016 and 2018, there will be 4 million sq m of new office supply in Shanghai, mainly in new emerging areas. Business districts along the Huangpu River such as North Bund, Xuhui Binjiang and Post-Expo Area will witness new completions of office buildings in the coming year.
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