32 RESEARCHSHAngHAi OFFiCE MARKET REPORT Q3 2018 tAblE 2 Major Grade-A offce sub-market indicators, Q3 2018 SubmarketRent(RMB / sqm / day)Rent % change (Q-o-Q)Vacancy rate Vacancy ratepercentage pointchange (Q-o-Q) Little Lujiazui12.64.9%↑ 0.1 Nanjing WestRoad10.8↓ 0.9%2.2% HuaihaiMiddle Road10.7↓ 0.9%2.2% Xujiahui7.8↑ 4.0%5.3% The CenturyAvenue8.7↓ 1.1%8.5%↓ 1.0 Source: knight Frank research FIGUrE 1 Grade-A offce rental and price indices With the global economic slowing down,companies became more cautiousabout the relocation, expansion andestablishment of offces as offceoccupational costs account for a largeproportion of operating costs. In Q3,the average rents in Nanjing West Roadand Huaihai Middle Road fell slightly toRMB10.8 and RMB10.7 per sqm perday respectively, both decreasing 0.9percentage point compared with theprevious quarter. The average rent in Little Lujiazui remainedat RMB12.6 per sqm per day (see Table2). Industries with high rental affordability,including fnancial, insurance, law andconsulting frms, were keen to establishoffces in Core CBDs, which support therental level in Little Lujiazui. For example,UBS rented 1,200 sqm in Taiping FinanceTower, moving from Citibank Tower; ZhongLun Law Firm rented 6,000 sqm in TwoInternational Finance Centre and CCICrented 12,000 sqm of offce space inShanghai Tower.In Q3, the average rent in Hongkou NorthBund remained at RMB7.0 per sqm perday. North Bund, featuring shipping andfnance, has attracted many companies.For example, Ince & Co InternationalLaw Firm which provides consultingservices and legal counselling to shippingenterprises rented 1,200 sqm in Sinar MasPlaza in the North Bund area, relocatedfrom Park Place on Nanjing West Road. In the primary strata-title sales market,the average transaction price of offcesin Shanghai decreased 1.5% Q-o-Q toRMB65,480 per sqm in Q3. Saleable offceprojects are now mainly concentrated innew emerging business districts such asXuhui Binjiang and Hongqiao CBD, withlarge amount of new supply and relativelylow price. In Q3, the average unit priceof strata-title offces in Xuhui Binjiangreached RMB70,000 per sqm while that inHongqiao CBD ranged from RMB30,000 toRMB63,000 per sqm. The average Grade-A office rent stayedflat at RMB9.5 per sqm per day (seeTable 1). The average rent in Core CBDsalso remained stable at RMB11.6 persqm per day. The overall Grade-A office vacancyrate dropped 0.5 percentage point to5% quarter on quarter (Q-o-Q) (seeTable 1). Many landlords offered hugeconcessions to attract potential tenantswith strict cost controls, thus the overallvacancy rate declined. In Q3, leasing demand from finance andconsulting companies persisted whilenew energy and artificial intelligence (AI)industries became more active. The net absorption in Shanghai’sGrade-A office market wasapproximately 223,355 sqm duringrENtS ANDprICES Source: knight Frank research GrOWtH OF NEWGrADE-A OFFICE SUpplYStAGGErS IN Q3 New Grade-A offce supply in the third quarter (Q3)of 2018 was approximately 145,700 sqm, a 41.6%decrease from the previous quarter.the quarter and that in the firstthree quarters in 2018 amounted toapproximately 700,000 sqm (see Figure2). The vacancy rate in Puxi remainedstable at 4.3%, while that in Pudongdecreased by 1.3 percentage points to5.9% due to the decrease in vacancyrates in the Century Avenue area. In the fourth quarter (Q4), 700,000 sqmof new office space will be added to themarket. The large amount of new supplyand the weakened leasing demand willimpose downward pressure on Grade-Aoffice rents and the market rents areexpected to fall. Except co-workingoperators and financial institutions suchas banks and insurance companies,the office leasing demand of otherindustries will be further weakened. tAblE 1 Shanghai Grade-A offce market indicators IndicatorQ3 2018 fgureQ-o-Q changeOutlook (Q4 2018) New supply145,700 sqm↓ 41.6%↗ RentRMB9.5 / sqm / day↘ Vacancy rate5.0%↓ 0.5 percantage point↗ PriceRMB65,480 / sqm↓ 1.5%↘ Source: knight Frank research tAblE 3 Major Grade-A offce leasing transactions, Q3 2018 DistrictBuildingZoneArea (sqm) HongkouSinar Mas PlazaHigh1,200 PudongIFC Phase TwoMiddle6,000 Source: knight Frank research Note: all transactions are subject to confrmation tAblE 4 Major Grade-A offce strata-title sales transactions, Q3 2018 DistrictBuildingFloor / unitArea (sqm)Price (RMB / sqm) Minhang Macrolink International Centre3rd foor unit 65463,000 XuhuiGreenland Centre Phase Two9th foor unit 35370,563 Source: Shanghai real Estate trading Centre / knight Frank research Note: all transactions are subject to confrmation 0 50 100 150 200 250 300 350 Q1Q3Q1Q3Q1Q3Q1Q3Q1Q3Q1Q3Q1Q3Q1Q3Q1Q3Q1Q3Q1Q3Q1Q3 200720082009201020112012201320142015201620172018 2003Q1=100Rental indexPrice index 5 研究报告上海写字楼市场报告 2018 年第三季度 4 New supply was still concentrated inPudong and Minhang in Q3. TaikangInsurance Tower in the Century Avenuein Pudong, which is also known asBuilding 1 of Pudong Financial Plaza wascompleted and delivered, bringing 85,700sqm of office space to the market andbeing the last completed office buildingin Pudong Financial Plaza Project. SCEPlaza in Hongqiao CBD in Minhang alsocame online, adding 60,000 sqm of officespace to the market.Over 700,000 sqm of new supply will becompleted in Q4, with Hongqiao CBD andQiantan accounting for more than 30% ofthe total area. Foxconn Building in the CoreCBD Little Lujiazui will be completed anddelivered in Q4. Vacancy rate in CBDs increased by1.4 percentage points Q-o-Q to 6.1%.Amongst, vacancy rate of Zhuyuan roseto approximately 3.3%, an increase of2.0 percentage points from the previousquarter as the vacant space increasedshortly due to some office tenants’moving out from Zhuyuan. Zhangjiang has gradually become an officemarket hotspot in Shanghai. Accordingto the master plan of Zhangjiang ScienceCity, Zhangjiang will be upgraded to acity sub-centre in 2020 to achieve greaterimprovements both in zone size anddevelopment scale. Standard officebuildings and retail facilities will be keydevelopments in Zhangjiang’s officemarket. It is expected that Zhangjiang willbecome a new emerging office area. OfficeSUpplY AND DEmAND ArEA IN FOCUS 甲级写字楼平均租金保持不变，约为每天 每平方米人民币9.5元（见表一）。核心商 务区市场平均租金亦保持稳定，维持在每 天每平方米人民币11.6元。 上海写字楼市场整体空置率环比减少0.5个 百分点至5%（见表一）。部分写字楼区域 租赁双方租金谈判空间加大，因此吸引了 一些成本有严格控制的企业，从而令整体 空置率有所下降。 第三季度，来自金融和咨询行业的租赁需 求保持稳定，而新能源以及人工智能研发 企业租赁活动较多。 第三季度，上海甲级写字楼市场净吸纳面 积约为223,355平方米，前三季度净吸纳面 FIGUrE 2 Grade-A offce supply, take-up and vacancy rate 三季度甲级写字楼新供 面积增速放缓 2018年第三季度，上海甲级写字楼市场新增办公面 积约145,700平方米，与上一季度相比减少41.6%。 表一 上海甲级写字楼市场参考指标 指标2018年第三季度数字按季变幅预测(2018年第四季) 新增供应145,700平方米↓41.6%↗ 租金人民币9.5元/平方米/天↘ 空置率5.0%↓0.5个百分点↗ 价格人民币65,480元/平方米↓1.5%↘ 资料来源：莱坊研究部 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 20082009201020112012201320142015201620172018Q1-Q3 '000 sqm Grade-A office supply (left)Grade-A office net absorption (left)Vacancy rate (right) portion will be included in most new mixed- use projects to solve the problem of officespace shortage in the area. For examples,Sandhill Phase Two and CSC DongfuProject, both near Guanglan Road MetroStation, are expected to add 32,000 and200,000 sqm of office space respectively tothe market in the future. In Q3, the average office rent in Zhangjiangreached RMB4.9 per sqm per day.积约为70万平方米（见图二）。浦西表现 稳定，市场空置率维持在4.3%；而浦东由 于世纪大道区域的空置率降低，空置率环 比降低1.3个百分点至5.9%。 第四季度，市场预计会有70万平方米左右 的写字楼新供入市。我们认为大量的新增 供应、市场整体租赁需求走弱将持续掣肘 甲级写字楼租金的增长，预计租金将继续 下行。除