China's Tianjin office space supply to remain tight

No new prime office building were built in Tianjin in 2Q12 with developers adopting a wait-and-see stance.

Colliers said that developers are "hesitating" in pushing forward office developments in Tianjin’s urban district, a cautious sentiment that "should pace through the rest of 2012 and 2013."

Here's more from Colliers:

Market Review. There were no new prime office buildings completed in Tianjin during the quarter. As a result, the total stock of Tianjin’s prime office property market remained at 0.96 million sq m as of end-2Q12.

The overall rents in Tianjin’s prime office market increased slightly in 2Q12, with the net effective rents averaging at RMB120.5 per sq m per month as of end-2Q12, up 0.21% q-o-q or 8.69% y-o-y.

Domestic enterprises, government agencies and individual investors continued to be major buying forces in Tianjin’s office property investment market, as evidenced by several significant transactions.

Market Outlook. Looking ahead, Tianjin’s prime office market should maintain a stable development, underscored by the city’s healthy economic fundamentals.

It is forecast that the overall vacancy rate should continue to decline over the next six months, reinforcing most landlords’ stance on contract rentals and in turn yielding a rather subdued rental movement during the same period.

In 2013, new prime office supply should remain limited. It is expected that the leasing and investment market for 2013 should remain relatively quiet.

Developers’ hesitating or wait-and-see attitudes in office developments in Tianjin’s urban district also reflect some cautious sentiment in the local market and this trend should pace through the rest of 2012 and 2013.