2023-11-03-莱坊-Guangzhou_office_market_report_Q3_2023_6页_1mb

Guangzhou Grade-A Office Market Q3 2023 Summary

Overview and Outlook

• Leasing Demand: Weak overall, with Q3 net absorption decreasing by 12.9% QoQ. Renewals and relocations drove leasing activity, reflecting tenant cost-cutting measures.
• Vacancy Rate: Slight QoQ decrease to 13.9%, but remains elevated. End-of-year budget cycles may increase inquiries.
• Economic Recovery: Limited effectiveness in boosting leasing demand; industries like finance and TMT show resilience, while retail and logistics lag.

Rental Levels

• Average Rent: RMB 144.1/sqm/month, continuing the 15% YoY decline and 2.5% QoQ drop.
• Submarket Trends: Zhujiang New Town saw the largest rent decline (5.0%), influenced by older building supply and "trading price for volume" strategies.

Supply and Demand

• New Supply: Absorption pressure remains high, with Q3 net absorption down due to weak demand. 2023 total supply projected at 880,000 sqm, potentially increasing competition in Q4.
• Industry Demand: Strong leasing activity from finance (securities, insurance) and TMT sectors. Retail and logistics sectors partially offset weak demand.

Investment Market

• High-End Manufacturing: Policies supporting high-end manufacturing and foreign access aim to fuel office demand, especially in clusters near exhibitions and finance hubs.
• Pressure Factors: Combination of increased supply and persistent demand constraints suggests rent and vacancy rates will continue downward pressure into Q4.

Market Indicators (Q3 2023)

Key Transactions (Q3 2023)

• Notable Leases: GF Securities (Pazhou), MFG (Zhujiang New Town), Guotai Junan Securities (Zhujiang New Town), Q-Man Toys (Zhujiang New Town).

Outlook

• Q4 expected to see intensified competition with increased supply pushing rents lower. Tenant-oriented leasing strategies and diversification of offerings are recommended.