More Office Space to Come in the Greater Bay Area
Guangzhou, Shenzhen and Hong Kong, which are already home to the headquarters of many Fortune 500 companies, will maintain their status as major business hubs in the GBA. The vacancy rate of these cities ranges from 5% to 10%. These cities all have plans to develop new CBD, including Pazhou and Finance City in Guangzhou, Houhai and Qianhai in Shenzhen and Kowloon East in Hong Kong. New office supply in Guangzhou, Shenzhen and Hong Kong will reach 2.43 million, 2.07 million and 0.25 million sq. m., respectively, by 2022. New stock will be released in phases and will continue to attract corporations, leading to a sustained increase in occupancy and rents.
Dongguan and Foshan currently offer around 2 million sq. m. of quality office space. Some service providers and technology firms have already relocated their headquarters, back-office operations and R&D departments to these two cities. Office rents in neighbouring Guangzhou and Shenzhen have reached RMB140-210 and RMB200-250 per sq. m., respectively, while rents in Dongguan and Foshan currently stand at RMB60-80.
New space will be gradually introduced to the market in the coming years, pushing up vacancy at regular intervals. However, strong leasing demand from corporate occupiers, along with investors purchasing space for self-use, should ensure occupancy and rents increase in the long run. Limited future supply and sustained demand suggest that these established CBDs will experience low vacancy and relatively high rents for a prolonged period.
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