Wuhan's Grade A Office Market Absorption Better than Pre-Epidemic Levels, Report Finds

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The report “Wuhan Commercial Real Estate Market Review and Outlook for the Fourth Quarter of 2022” released by Jones Lang LaSalle on 10 October shows that the new supply in Wuhan office market hit a record high of 1.17 million square meters in 2022; the annual absorption of the Grade A office market was about 200,000 square meters, better than the level before the 2019 epidemic.

The report shows that in the first half of 2022, Wuhan’s premium office market saw a small peak in supply, and following a concentrated supply in the first three quarters, the market supply fell back slightly in the fourth quarter. By the end of December 2022, the overall volume of prime office space in Wuhan reached 7.988 million square meters.

Benefiting from the leasing demand negotiated in the first three quarters settling in the fourth quarter, the overall market demand performance was relatively solid. The report shows that third-party office operations continued to be active in the fourth quarter of 2022, accounting for 19% of the fourth-quarter transactions in the Grade A office market; in addition, demand from the technology and internet industry picked up, dominated by technology new media and internet e-commerce platforms.

The report also focuses on a slight decline in the share of traditional finance and real estate buildings in 2022 due to new projects and economic policy guidance, and an increase in demand from technology and internet, third-party office operations, cross-industry groups and government platforms.

According to Xin Yi, General Manager of Jones Lang LaSalle’s Wuhan, Nanjing and Hangzhou offices, China’s economy is expected to accelerate its recovery, and Wuhan has entered a phase of industrial innovation and upgrading and accelerated development and construction of its financial center, which is expected to bring more new demand to Wuhan’s premium office market.

Currently, Wuhan is focusing on building world-class industrial clusters such as optoelectronics, automotive and health; promoting the development of digital economy and carbon finance. According to Liu Ning, Director of Wuhan Commercial Real Estate Department of Jones Lang LaSalle, in the future, with the multiple empowerment of policies, finance, technology and facilities platforms, Wuhan’s industries and economy are expected to upgrade and expand and steadily recover, which will also inject momentum into the development of Wuhan’s premium office market.

According to Jones Lang LaSalle, Wuhan’s premium office market is expected to remain at a high level of supply in 2023. As the economy recovers, the technology and internet industry, the financial sector and third-party co-working are expected to expand further, continuing to support market demand. (End)