The US-China trade war, excess capacity built up in the past ten years, and flight from expensive areas are the main causes. In Shenzhen rental discounts can reach 50 per cent. The International Monetary Fund cuts Chinese growth forecast.
Shanghai (AsiaNews/Agencies) – The office vacancy rate in 17 major Chinese cities has climbed to 21.5 per cent in the third quarter, the highest since the 2008 financial crisis, this according to the CBRE Group Inc. There are several reasons for trend.
Foreign companies are waiting for an end to the US-China trade war before committing to new leases. And to avoid US duties, many have moved production to South or South-East Asia or to Hong Kong.
Another reason is the abundant office space supply in skyscrapers built up during the boom years.
Lastly, cost-conscious companies are moving to cheaper buildings as the economy slows.
For example, Mitsubishi UFJ Financial Group Inc. left Shanghai’s Lujiazui district for the emerging business zone of Qiantan, where rents are about 50 per cent cheaper.
In Shenzhen, one of China’s richest cities, rents have been discounted by as much as 50 per cent to attract tenants to Qianhai, a business zone established nine years ago where two-thirds of office space is empty.
Meanwhile, the International Monetary Fund (IMF) two days ago adjusted its Chinese growth forecasts to 6.1 for 2019 and 5.8 for 2020, the lowest since 1990.