Companies to lead office building demand

Domestic companies, including State-owned enterprises, are expected to lead the demand for grade-A office buildings in Guangzhou this year, due to the stabilizing market and positive signals in the domestic economy, according to Savills Property Services (Guangzhou) Co.

However, huge new supply — estimated at 737,000 square meters this year — is expected to push up the vacancy rate and further exert pressure on rent growth.

The average rent for grade-A office buildings in Guangzhou declined 1.7 percent year-on-year in 2012 to 146.5 yuan ($23.22) per square meter per month, amid the soft global economy.

The vacancy rate was 10.1 percent at the end of last year.

Meanwhile, the residential property market in the city is projected to continue to recover, but a significant price increase is ruled out due to the policy of protecting the rigid demand and limiting speculation.

About 6.81 million square meters of residential developments were sold in the city in the first 11 months of last year, up 30.3 percent year-on-year.

The average price stood at 14,770 yuan per square meter during that period, up 10.5 percent year-on-year.