A slightly lower demand for Grade-A offices in Guangzhou, capital of Guangdong province, is forecast in the second half of the year, due to the slow expansion of foreign-funded companies.

According to a report by JLL, a global property advisory group, the Grade-A office market in Guangzhou, a major commercial and business hub in South China, will be affected as a growing number of multinational companies slow its development pace in the city.

"However, local businesses, especially in the non-traditional banks and financial sectors, will become a major force of expansion for Grade-A offices," said Wu Zhonghao, managing director of JLL (South China).

Multinational companies would retain a lower demand for new offices, according to Wu.

"Most of them were willing to move to offices with lower prices in the first half of the year," he said.

Guangzhou will provide about 700,000sqm of new offices in the second half of the year, prompting a higher vacancy rate in the near future, the report says.