高力国际-杭州-苏州-南京-武汉-2018年上半年写字楼市场回顾-2018.9-10页-1mb

报告摘要

Summary of Flexible Workspace Market Trends in Tier II Cities of East China

Core Content

The flexible workspace market in East China is experiencing significant expansion, particularly in Tier II cities such as Hangzhou, Nanjing, Suzhou, and Wuhan. This growth is driven by strong demand from technology, media, and telecommunications (TMT), financial, and professional services sectors, which has led to a decline in vacancy rates and an increase in average rents in these cities. While some cities like Hangzhou and Suzhou are seeing consistent rental growth, others like Nanjing and Wuhan face potential downward pressure due to large new supply pipelines. The market is expected to evolve over the next few years with changes in supply, demand, and rental trends.

Main Points

Market Expansion: Flexible workspace operators are expanding rapidly in Tier II cities, with several large leases signed in 2018 H1.
Net Absorption: Net absorption increased significantly in most cities, except Nanjing, where it declined due to limited new supply.
Vacancy Rates: Vacancy rates have declined in H1 2018, but are expected to rise in H2 2018 for Nanjing and Suzhou, while remaining stable in Hangzhou and Wuhan.
Rent Trends: Average rents in Hangzhou and Suzhou are expected to rise by 4-5% annually through 2022, while Nanjing and Wuhan may see downward pressure due to new supply.
New Supply Outlook:
- 2018 H2: 11 projects will enter the market, adding approximately 673,000 sq m (7.2 million sq ft) of office space.
- 2019-2022: 4.34 million sq m (46.72 million sq ft) of new supply, or 52% of current total stock, is expected to be completed.
Submarket Performance:
- Hangzhou: Qianjiang New City saw the most significant decline in vacancy rate, while Huanglong remained stable.
- Nanjing: The Hexi submarket is the main contributor to new supply and is expected to drive demand and tenant upgrades.
- Suzhou: The Lake West and Lake East submarkets saw substantial vacancy rate declines, while the Suzhou New District saw a slight increase.
- Wuhan: Despite new supply, the market remains competitive, with average rents stable but likely to decline over the next few years.

Key Information

Flexible Workspace Impact: Flexible workspace operators are playing a key role in driving demand and absorbing vacant space, especially in Hangzhou and Suzhou.
Recommendations for Landlords: Office landlords are advised to engage with leading flexible workspace operators due to their strong brand reputation, service quality, and community management capabilities.
Supply and Demand Dynamics: While demand is strong, especially in TMT and real estate sectors, the supply pipeline in some cities may outpace demand, leading to increased vacancy and lower rents.
Future Outlook:
- 2018-2019: Vacancy rates may rise slightly, with stable or declining rents.
- 2020-2022: Supply is expected to slow, leading to gradual declines in vacancy and increases in rents.

Market Statistics

City	H1 2018 Net Absorption	H1 2018 Vacancy Rate	H1 2018 Average Rent	H2 2018 Vacancy Rate Prediction	2019-2022 Vacancy Rate Prediction	2019-2022 Rent Growth Prediction
Hangzhou	117,000 sq m (1.26M sq ft)	14.6%	RMB4.3 psm per day	Stable	Gradual decline	4-5% annual increase
Nanjing	24,000 sq m (258,333 sq ft)	6.2%	RMB4.5 psm per day	Rise to 8%	Peak at 18%	1-3% decline in 2019, then 2-3% increase
Suzhou	106,000 sq m (1.14M sq ft)	20.6%	RMB2.9 psm per day	Rise to 25-26%	Decline to 19%	1-2% annual increase
Wuhan	155,000 sq m (1.67M sq ft)	28.6%	RMB3.5 psm per day	Stable	28-30%	3-4% decline

Conclusion

The flexible workspace sector is a major driver of demand in East China's Tier II cities, contributing to lower vacancy rates and higher rent levels. While some cities are expected to see increased supply and potential rent declines, others will benefit from reduced supply and rising rents. Landlords are advised to partner with leading flexible workspace operators to capitalize on this trend and improve market positioning.

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