Why companies are turning away from offices in Shanghai’s main business areas

A growing number of companies in Shanghai are considering relocating to offices away from the central business areas, where they can pay up to 40 per cent less in rent.

The city’s “non-CBD” office market is booming as firms increasingly choose to base themselves in “decentralised” business areas that enjoy good transport links and local amenities.

In a survey of 196 companies and institutions carried out by property services firm JLL, 23 per cent of respondents expressed a “strong interest” in relocating to decentralised business areas.

Shanghai is set to overtake Hong Kong as China’s biggest office market in terms of total supply of space in 2020.

JLL forecasts that the amount of Grade A office space in Shanghai’s decentralised office blocks will jump from 5.1 million square metres now to about 9 million square metres in 2020. This includes areas like the World Expo site, Yanggao Road and Shanghai Railway Station.

The amount of Grade A office space in Shanghai’s central business districts (CBDs) is forecast to increase by 1.4 million sq m to 7.5 million sq m in the same period.