Shanghai Figures Q1 2022
April 13, 2022
Leasing and investment remain strong but lockdown set to disrupt activity in coming weeks
One new office project providing 70,000 sq. m. was completed this quarter. Net take-up was strong amid robust demand from the finance sector, led by securities firms and funds. Rents rose by 1.0% q-o-q, supported by strong increases in tightly supplied core CBDs such as Nanjing West Road and Huaihai Road.
No new supply came on stream this quarter but several malls commenced renovation and upgrading work. F&B stores dominated leasing activity while fashion retailers were also active. More landlords are using art displays and other exhibitions to attract consumers and increase dwell time.
New supply totalled just under 143,000 sq. m.. Net absorption shrank following the conclusion of several major online shopping festivals and the completion of short-term e-commerce leases. 3PLs dominated leasing demand, with firms engaged in cross-border logistics especially active.
Three new projects providing 253,400 sq. m. were delivered in Q1 2022. Seasonal factors and the ongoing pandemic dampened pre-leasing in new supply, creating downward pressure on net take-up, which fell to 99,000 sq. m. Overall vacancy rose 1 pp to 15.5%.
12 investment deals worth a total of RMB 22.6 billion were completed this quarter, a decline of 36.4% q-o-q but a rise of 91.8% y-o-y. Quarterly investment volume surpassed the five-year rolling average during the quarter. Deals were mainly driven by acquisitions for investment purposes. with owner-occupiers accounting for just 25% of total transactions.