Chinese office landlords offer free furnishings to lure tenants amid economic squeeze
‘Rental fees are going down, and competition is getting fiercer,’ as landlords fight to sustain occupancy rates, CBRE researcher says
More landlords in mainland China are willing to offer corporate tenants furnished office space to increase occupancy as a financial squeeze hobbles businesses from financial institutions to retail chain operators.
Such incentives have become necessary to lure tenants with limited budgets as competition intensifies amid glut worries, said Fion Zhang, head of office, advisory and transaction services with property consultancy CBRE China.
“Furnishing cost has become a major concern among some companies facing budget constraints even though they still have high demand for new office space,” she said. “It is advisable for landlords to consider tailor-made packages to address their needs.”
A recent survey of 237 corporate tenants by CBRE showed that a third of companies interested in expanding or relocating cannot afford to furnish their offices.
The vacancy rate for premium office buildings in Shanghai is expected to top 24 per cent in the second half of 2024, compared with 21.2 per cent as of June, according to Sam Xie, CBRE China’s head of research.
