Shanghai Grade 'A' Office Market

• No new projects were launched onto the market in the first quarter with market demand focusing on absorbing space in existing projects.
• Net take-up by the end of the first quarter amounted to 126,300 sqm, the equivalent of the 40 per cent of last year's accumulated net take up.
• Rents fell by 2.9 per cent in the first quarter, down 26.5 per cent from its peak in the third quarter of 2008.
• The citywide vacancy rate fell to 14.0 per cent in the first quarter, with demand picking up and no new supply coming onto the market.
• Two en bloc office investment deals were concluded by foreign investors in the first quarter.
• A number of developers postponed projects to 2011 as competition for tenants remains fierce.

Shanghai Retail Market

• One new shopping mall launched in the first quarter of 2010, adding 46,900 sqm supply to the market.
• Average first floor prime shopping mall rents rise 1.0 per cent in the first quarter to RMB34.0 per sqm per day.
• Citywide prime shopping mall vacancy rate increases 1.2 percentage points in the first quarter to 4.6 per cent.
• Competition amongst high-end supermarket chains intensifies.
• Henderson Metropolitan on Nanjing Road (E) is now looking for tenants, with Apple already committed to open a flagship store within the project.

Shanghai Residential Leasing Market

• As the 2010 World Expo approaches and the Chinese economy continues to recover, the high end residential leasing market witnessed a sustained pick up in demand.
• The citywide occupancy rate rose by 5.4 percentage points in the first quarter to 86.1 per cent.
• Overall rents of leasing market rose by 0.4 per cent in the first quarter to an average of RMB158.2 per sqm per month as landlords, encouraged by the pick up in demand and expecting even more demand in the coming months, increased rents.
• The influx of more expatriates, as the economy continues to recover and arrivals of foreign visitors and employees for Expo, helped to increase demand for short and mid term stays and push up the rents and occupancy rates for serviced apartments.
• Six serviced apartment projects are projected to be launched this year helping to release the pressure on rising rents towards the end of the year.

Shanghai Residential Sales Market

• The start of the new year witnessed more government measures designed to cool the residential and land markets.
• First hand transaction volume fell dramatically in the first quarter to 800,000 sqm per month, down from 2 million sqm per month in the fourth quarter of last year as result of government regulations and the seasonality of the market.
• Overall first hand commodity residential price growth slowed in the first quarter and price reached an average of RMB20,292 per sqm in end of the first quarter just up 0.9 per cent compared with the end of last quarter.
• High-end apartment and villa markets mirror the trend of wider market with transaction volumes falling by 31.7 and 37.2 per cent respectively compared with the previous quarter.
• Second hand market witnessed transaction volume fall by 31.3 per cent in the first quarter compared the same period last year to 2.1 million sqm.
• Overall second hand residential price growth slowed to 6 per cent in the end of the first quarter reaching RMB16,399 per sqm.

Information provided by:
Savills Research & Consultancy

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