Did you know that Shanghai has a population of almost 14 million people?
That’s almost twice that of London. That’s a lot of people, especially when you consider that they are pretty much the same size.
According to one survey, serviced office rents rose faster in Shanghai than anywhere else in Asia last year.
The rise in Shanghai was the third fastest in the world, the survey by real estate consultant Cushman & Wakefield found.
Rising 9.7 percent last year, Shanghai’s annual occupancy cost was reported at 2,878 yuan (US$347.70) a square meter, ranking 29th in the world.
Monterrey, Mexico, topped the growth rate at 10.5 percent, followed by Brussels, Belgium, with 10 percent.
The annual survey monitored the world’s 202 top office locations in 45 countries. In about 40 percent of the locations, rents either rose or were stable last year.
Shanghai became the most expensive city on China’s mainland in 2003, although it still ranks far behind Hong Kong, which is ranked 17th in the world.
Chris Cuff, Cushman & Wakefield’s China’s executive director of agency services said, ‘the huge increase in new office space was surpassed by even greater growth in demand from both local and multinational companies.’
‘New demand is expected to continue to outpace new supply for at least the next two years, leading to lower vacancy rates and higher rents’, Cuff said.
Guy Hollis, head of Jones Lang LaSalle China, also forecast a bright future for the local office market. ‘Shanghai’s office market is at nine o’clock on a market cycle’, Hollis said. ‘The demand and rents will grow stably in the coming several years.’
The blistering economic growth on the Chinese mainland and the relaxation of business restrictions under the WTO arrangement will continue to attract large, multinational corporations to China, particularly Shanghai.
Jones Lang LaSalle said overseas insurance companies eyeing a stake in China’s emerging insurance sector will become major consumers of new commercial property buildings in Shanghai.
In this year’s survey, Tokyo is the most expensive office location in Asia and London retains its position as the world’s most expensive city for office space.
In London’s Mayfair the total cost of occupying one square meter of prime office space is US$1,659 a year. This is 80 percent more than the US$920 in Tokyo.
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