China's real estate sector is struggling to fill up office spaces in its skyscrapers as more companies are shifting to the "work from home" trend.
The vacancy rate for office space in the country's tech hub Shenzhen reached 26.4 per cent in the April-June quarter, which is up by 7.5 per cent from the same period in 2019, NIKKEI Asia reported citing reports from the National Bureau of Statistics.
China's investment in real estate development jumped to USD 92.6 billion in 2015 from about USD 27.7 billion in 2010, while the numbers remained at elevated levels through 2020.
In Shenzhen's Futian financial district, a 65-story building "was 70 per cent vacant at its worst point," a property market source informed. "While lease activity has picked up somewhat, monthly rent per square meter remains depressed at 200 yuan (USD 30), or about 60 per cent of pre-pandemic levels, a person informed.
Due to the coronavirus pandemic, telecommuting or 'work from home' has become a new trend spurring companies to relocate themselves to cheaper workspaces causing a high rate of vacant offices.
Recently, SOHO China, an office and commercial property developer has also decided to sell off majority of its stake to Blackstone, which is the world's biggest alternative asset manager, this happend after SOHO China was struggling to keep up with bigger players in terms of the scale and speed of its projects. The company suffered a third straight year of falling net profit in 2020, NIKKEI Asia reported reported.
Meanwhile, Nanning city administration also decided that it will let the offices and shopping centres convert themselves into housing, educational institutions and other facilities they meet certain conditions.
( With inputs from ANI )
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