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UDN: China’s Office Building Vacancy Rate Dangerously High Since the Global Financial Crisis

United Daily News (UDN), one of the primary Taiwanese news groups, recently reported that commercial real estate, especially office buildings, have been suffering the highest vacancy rates lately across all Chinese major cities. According to data that China Finance Online (NASDAQ: JRJC) provided, the city of Shenzhen suffered a top-tier office building vacancy rate of 22.4 percent in the third quarter of 2019. In some areas the vacancy rate reached 50 percent. In the first half of 2019, in the most valuable locations of Shenzhen, the vacancy rate, at one point, reached 65.7 percent. For decades, Shenzhen has been the most rapidly growing Chinese city. For Q3 of 2019, the vacancy rate for Beijing was 19.5 percent and it was 10.9 percent in Shanghai. For the same period of time, it was 4.8 percent, 4 percent, 3.8 percent and 0.7 percent for Singapore, London, San Francisco and Tokyo, respectively. Analysts expressed the belief that the US-China trade war was the issue. The result was that, in major Chinese cities, a large number of companies have held back from renting offices. Second-tier cities suffered more. Key provincial capital cities typically saw office buildings having average vacancy rates above 30 percent.

Source: UDN, January 8, 2020