Bullish Q4 outlook for Guangzhou's office rental market

Rental levels for Grade A offices in Guangzhou, the capital of Guangdong province, will continue to move higher in the last quarter of this year, thanks to growing demand spurred by favorable policies, according to an industrial report.

The report on Guangzhou's office market in the third quarter of 2018, released by real estate consultancy service provider Cushman & Wakefield on Wednesday, indicated that robust demand helped push down the market's overall vacancy rate 1.3 percentage points quarter-on-quarter to 4.3 percent in the third quarter in Guangzhou, hitting a record low over the past 10 years.

The market witnessed steady demand for office space during the quarter, recording net absorption of 60,793 square meters, according to the report.

With a limited new supply coming online and robust office demand, Guangzhou recorded a citywide average rent of 195.9 yuan per square meter per month, up 1.9 percent quarter-on-quarter in Q3.

Although the expected concentration of new completions ahead is projected to increase the city's vacancy rate, rental prices will continue to rise in the quarter ahead, driven by favorable policies brought by the Greater Bay Area Initiative and the city's industrial expansion plan, according to the report.