Between January and June of 2012, over 435,000 sq m of commercial office space changed hands in Shanghai. The number of units rented also rose during this period. The latest commercial property report on China released by international property services firm DTZ points to growing interest in the area from local investors.
Sales involving office buildings in Shanghai accounted for almost three-quarters of the real estate market in the first half of this year, according to the report. In 2011, real estate transactions involving commercial building accounted for 67 per cent of total sales in Shanghai.
The average price per sq m increased from 17,000 yuan in January to 25,000 yuan per in June. The average cost to rent a Grade A office building in Shanghai increased by 4.1 per cent in year-on-year growth.
In the Jing’an district, which is one of the city’s busiest downtown areas and home to a number of desirable Grade A office buildings, rents increased by a very impressive 13.3 per cent. In the first quarter of 2011, the standard rate for commercial office space was 8.7 yuan per diem. By the end of the year, the rate had risen to 9.2 yuan per diem for the same space.
First-rate commercial office space with similar features available in Guangzhou can be obtained for 4.8 yuan per day. Office space in Suzhou and Ningbo cost less than 2.5 yuan per diem.
The majority of funds involved in commercial real estate purchases this year were from domestic buyers. When foreign buyers venture into the Chinese market, they are more likely to purchase properties in second and third-tier cities, while domestic buyers are targeting properties in Beijing and Shanghai.
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