What’s new: Guangzhou’s most sought-after office spaces saw a decrease in demand as the vacancy rate of Grade-A offices rose by 1 percentage point from a quarter earlier, according to real estate consultancy Cushman & Wakefield Inc.
Still, the vacancy rate for the provincial capital of Guangdong province remained the lowest among China’s four first-tier cities. As of the end of June, Guangzhou’s office vacancy rate stood at 9.6%, while Shenzhen hit 22.4% and Beijing reached 13.9%.
The firm did not provide figures from Shanghai, where a grueling two-month lockdown was lifted last month, saying they were not available.
“Pandemic outbreaks have emerged in several Chinese commercial hubs over the past six months, and that uncertainty slowed down companies’ decision on whether to renew their leases,” Cushman & Wakefield said in the press release.
Background: Major conglomerates in Guangzhou tend to build and own the office buildings that they operate in, while leasing out space to companies within their supply chains, a representative for Cushman & Wakefield said. Examples of such firms are TCL Technology Group Corp., Tencent Holdings Ltd., Alibaba Group Holding Ltd., and Beijing Guomei Electronics Co. This arrangement contributes to the city’s lower vacancy rate, Cushman added.
Many tech companies have been through a wave of layoffs since early this year. Both Beijing Kuaishou Technology Co. Ltd. and Tencent fired swathes of employees as Covid lockdowns and regulatory hostility continued to weigh on their financial performance.
Contact reporter Manyun Zou (manyunzou@caixin.com) and editor Bertrand Teo (bertrandteo@caixin.com)
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