In 2023, the office market is like stepping on a big piece of shit, and it stinks everywhere. You see, the vacancy rates of office buildings in the four major first-tier cities are all frighteningly high, with Beijing, Shanghai, Guangzhou, and Shenzhen, each higher than the other, almost all of which are the highest levels in the past three years. No, the vacancy rate of Beijing's office buildings has reached the highest point since the end of 2009, which is simply a lot of uproar. Think about those traditional office areas, Wangjing, Financial Street, Zhongguancun, which is not the rent falling faster than jumping off a building?
However, this sad status quo is not formed in a while, and it has to be broken apart from the beginning to look at it piece by piece. First of all, we have to look at the net absorption, which is the new leased area plus the expanded area minus the surrendered area. For example, Shanghai's net absorption has been declining for three consecutive years, with only 390,000 square meters in 2023, compared to 1.42 million square meters in 2021. Shenzhen is also not good, the net absorption of Grade A office buildings in the market is less than 220,000 square meters, and it has hit a new low in the past decade, I don't know if this is a new high or a new low in the office market.
What's going on? Don't look at the vacancy rate and rent decline, in fact, the main reason is **surplus. Come to think of it, the scale of office buildings entering the market in Shanghai in 2023 will reach 1.55 million square meters, and the net absorption is only a quarter of this amount, and the oversupply is certain. An investment promotion staff in the office park said that one of his important tasks in 2023 is to maintain existing customers, especially those that are about to expire, which shows how important it is for them to maintain customers. In order to retain customers, the owners do not hesitate to reduce rents, extend the rent-free period and other means, and try their best to retain existing customers.
But what is more troublesome is the outlook for the future, Guangzhou is expected to usher in 700,000 square meters of Grade A office buildings, and Beijing is even more powerful, in the next three years, it will usher in a million square meters of new **, of which 40% will be concentrated in 2024. These numbers are no joke, and you have to be careful with them.
In short, the situation in the office market is even more tragic than singing. Vacancy rates are getting higher and higher, rents are getting lower and lower, landlords are desperately trying to retain existing customers, and the pressure of the future is even more prohibitive. No one wants to step on this big piece of shit, but there doesn't seem to be a good solution. Think about it or comfort yourself, at least, there is still a house for you to live in, the office market is sluggish, we still have the real estate market!