The office market in China's top-tier cities has reached the highest ranks worldwide, while a long-tail effect has been occurring in cities at the early development stage, a report from international real estate agency JLL showed.
Due to economic, social, demographic and other macro factors, China's office market development has involved four stages -- startup, construction, development and maturity -- according to office stock volume and rent levels in cities. Currently, only Beijing, Shanghai, Guangzhou and Shenzhen have reached maturity, with another 70 percent of Chinese cities still at the startup stage.
In addition to the first-tier cities, other cities with strong office demand are mostly provincial capitals such as Jinan, Xi'an and Chengdu, which benefit from relatively strong economic growth and steady expansion demand from large companies.
Based on the analysis, JLL has also determined a demand ceiling for each city's office market. The potential demand for Grade A and B offices is around 40 million square meters in Beijing and Shanghai, 20 million square meters in Guangzhou and Shenzhen, and over 7 million square meters in Chengdu, Nanjing and Hangzhou.
The top 10 cities in China are deemed to have a total potential demand exceeding the combined potential demand of more than 200 other lower-tier cities, demonstrating that China's office market demand is primarily driven by its leading cities.