Shanghai business park rents inch higher in Q2

Rents at business parks rose marginally in Shanghai in the second quarter amid a moderate recovery in demand, global property adviser Colliers International said in a recent report.

Across the city, business park rents stood at 3.79 yuan (54 US cents) daily per square meter between April and June, a quarter-over-quarter increase of 0.3 percent.

"Net absorption rebounded in the second quarter as many occupiers resumed expansion plans and actively signed new leases," said Jiang Peng, senior associate director of research, Colliers International, East China. "We expect demand to remain steady through the second half of this year, particularly from the technology and medical and health sectors."

Net take-up at business parks rose 9 percent from the first three months to around 162,000 square meters during the April-June period, mainly underpinned by software services, medical and health and fintech sectors which contributed to 34 percent, 20 percent and 11 percent of the total demand, respectively, Colliers data showed.

Meanwhile, the vacancy rate at business parks edged up by 0.7 percentage points in the second quarter to 23.4 percent on average. This follows an influx of new supply which totaled 343,000 square meters during the same three-month period.

For the second half of 2020, rents are expected to remain flat or increase slightly, followed by an uptick from 2021 to 2024 at an annual growth rate of around 1 percent, according to Colliers' forecast.