Western financial firms still want a piece of Shanghai’s office market

The Chinese government eased restrictions on foreign firms this year

New York Weekend Edition /
May.May 02, 2020 02:00 PM
Shanghai, China (Credit: Pixabay)

Shanghai, China (Credit: Pixabay)

Shanghai’s office market stands to benefit from strong appetite from foreign financial firms.

Financial institutions from around the globe moved to grab office spaces and expand their operations when the Chinese government announced last year it would ease restrictions on foreign involvement in the country’s financial system. Many are staying the course, according to Bloomberg.

“Foreign financial tenants are undeterred by the outbreak. We haven’t really seen anyone winding back expansion plans like some other multinational companies,” said CBRE’s Fion Zhang.

They’ve scooped up prime office spaces. Bank of America expanded its footprint by 20 percent when it moved into the International Finance Center in the fourth quarter.

Japanese brokerage Nomura Holdings has nearly doubled its footprint in anticipation of doubling its headcount in Shanghai by 2023. The influx of large foreign entities has helped bring in smaller firms too. Swiss firm EFG Bank AG for example signed a 120-square-meter lease late last year.

Strong demand is a relief for Shanghai developers and landlords. Among other things, a supply glut and China’s trade war with the United States last year pushed office vacancy rates to levels not seen since the last financial crisis.

Vacancy rates in Shanghai are expected to hit 30 percent this year and rents to drop 6 percent, according to Colliers International. [Bloomberg]Dennis Lynch


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