On July 1, 2024, Shanghai / PRNewswire/ - Colliers International Group Inc. (NASDAQ: CIGI, TSX: CIGI), a global diversified professional services and investment management company, recently reviewed and anticipated the Shanghai office market in the second quarter of 2024.

In the second quarter of 2024, Shanghai's Grade A office market continued the market trend of the first quarter, with overall demand still in the recovery stage.The newly added supply in the second quarter of 2024 fell year-on-year, and the market vacancy rate decreased slightly month-on-month. With a large amount of new supply entering the market, the downward trend of rent may continue. It is recommended that tenants with relocation and upgrade needs actively seize the opportunity.Market OverviewIn the second quarter of 2024, Shanghai's Grade A office market inventory was 16.9 million square meters, recorded across the city.The Shanghai office market is still in the adjustment and recovery period in the second quarter of 2024, with a net absorption of 91,000 square meters of Grade A office space and a period of stability.Only one new project entered the market in the second quarter of 2024, and new supply in the first half of the year fell. However, the total new supply in 2024 reached 1.57 million square meters, the highest supply in nearly five years.The Grade A office rent in Shanghai fell by 2.8% month-on-month to RMB 6.7 per square meter per day in the second quarter of 2024, continuing the downward trend of the past two years.

1.

Recorded in the second quarter of 2024, across all of ShanghaiClass A office building market inventory16.9 million square meters.

Recorded 9.1 thousand square meters of net absorption for Grade A office space in Shanghai in the second quarter of 2024, with periodic stability.

In the second quarter of 2024, there was only one new project added to the market and new supply in the first half of the year declined. However, the total new supply in 2024 was as high as 1.57 million square meters, the highest supply in nearly five years. It is expected thatIn 2024, the total newly added supply was as high as 1.57 million square meters, the highest supply in nearly five years..

• Recorded Grade A office rent for the entire city of Shanghai in the second quarter of 2024.RentGrade A office rent in Shanghai decreased month-on-month by 2.8% to RMB 6.7 per square meter per day in the second quarter of 2024.Grade A office rent in Shanghai decreased month-on-month by 2.8% to RMB 6.7 per square meter per day in the second quarter of 2024.Continued downward trend of the past two years.
• In the second quarter of Shanghai, the vacancy rate of Grade A office buildings decreased slightly by 0.3 percentage points from the previous quarter to 19.6% without new supply.

2.The leasing market is based on the exchange of price and quantity.

Professional services, internet-related technology, and finance.They are the top three leasing demand industries for the second quarter of 2024 in the Shanghai office market.accounting for the total source of demand.50%

About 71% of the new supply in the future is expected to be concentrated in the center sector of XuHui Binjiang and Wujiaochang submarkets.The office projects in this area will face more market competition and challenges.

Shanghai's core and sub-center submarkets
Q2 2024 Rental Performance and Vacancy Rate Comparison (RMB/sqm/day), Vacancy Rate Comparison

Market estimate

3.It is expected that there will continue to be a large number of new entries into the market in 2024, during which time the supply will exceed demand.

market competition for leases intensifies. Cost-saving relocation and lease extensions dominate the market.The leasing market competition has intensified as demand for the supply continues to exceed it.Cost-saving relocation and lease extensions remain the mainstream trend in the market..

Trends in Shanghai's Grade A office market
2021-2028F

4.Summary and Suggestions

Based on the current overall situation of oversupply and continuous adjustment of rents in the office market,tenants will have a wider range of leasing options and value-added services to choose from.Therefore, it is recommended that companies with relocation or upgrading plans actively seize the opportunity.

For property owners, on the one hand, they need to cope with the situation of exchanging price for quantity in the phase-oriented market, on the other hand, they need toregard the enhancement of property product power and service power as a long-term key indicators to meet the personalized needs of different tenant types for office space, property services, and leasing options.Through high-quality and differentiated price competition, breakthrough innovation, and steady development.To achieve the balance of directly competing with high quality and differentiation at a fair price.指标 To achieve the balance of directly competing with high quality and differentiation at a fair price. Property service should be improved to meet the personalized demand of tenants.