There have been new developments regarding the relocation of JD Shenzhen's largest office space. On August 27th, a source familiar with the matter told reporters from Nandu that as they have not yet received an effective rent reduction plan, JD.com has recently sent a comprehensive termination email to Shenzhen Zhuoyue Qianhai No.1 to discuss and determine the termination time and specific termination plan. JD.com has not yet responded to this.
According to previous reports from Nandu, at the end of July this year, JD.com may move out of Shenzhen Zhuoyue Qianhai No.1 due to high rent, and it is still unknown where it will move next. JD.com settled in this office in 2019. At present, this office is JD's largest office in South China, with thousands of employees. According to industry experts' analysis, it cannot be ruled out that JD.com may change its office space due to high rent. To reduce operating costs, JD.com may choose venues with higher cost-effectiveness or that can provide certain rental support.
The "termination email" revealed by insiders.
Rent reduction for office buildings in Guiwan area
According to public information, Shenzhen Zhuoyue Qianhai No.1 was completed in December 2017 by Zhuoyue Real Estate Group Co., Ltd. The project is located in the core area of the Qianhai Guiwan district in Shenzhen, consisting of 4 super Grade A office buildings and 2 top-level executive apartments. It is a high-end commercial complex in Qianhai.
The staff of Shenzhen Zhuoyue Qianhai No.1 told Nandu reporters that there are differences in rent on different floors, and the average price for higher floors is 150 yuan/m; Sup2;/month.
The staff also stated that Qianhai COFCO, which belongs to the Guiwan area along with Shenzhen Zhuoyue Qianhai No.1, is adjacent to Tencent and is a new office building that entered the market this year, with more competitive prices. Currently, the average rough quotation is 120/m& Sup2;/month. China Resources Qianhai has also lowered its rent this year.
Shenzhen office building competition continues to intensify this year
Due to insufficient demand and ongoing macroeconomic challenges, the Shenzhen office real estate market has been affected. According to data from Savills, as of the end of 2023, the vacancy rate of Grade A office buildings in Shenzhen has increased by 4 percentage points year-on-year to 28.9%, while the rental index has decreased by 5.4% year-on-year.
This year, the average rent for Grade A office buildings in Shenzhen is expected to continue to decrease. Savills recently released its report on the Shenzhen real estate market for the first half of 2024. The report data shows that in terms of rental prices, the competition for leasing between Grade A office building projects in Shenzhen remains fierce, and the strategy of exchanging price for quantity is widely adopted. Homeowners continue to provide rental discounts to enhance the attractiveness of their projects. As of the end of the second quarter, the rental index of Grade A office buildings in Shenzhen decreased by 2.1% month on month and 7.7% year-on-year.
It is reported that in the first half of 2024, the Shenzhen Grade A office market welcomed four new projects, all of which were delivered in the first quarter, with an additional area of approximately 205000 square meters. As of the end of the first half of the year, the total stock in the city reached 11.228 million square meters. In the second quarter of this year, there were no new projects entering the Shenzhen Grade A office market.
It can be foreseen that in the coming quarters, there will still be large-scale new supply concentrated delivery, and the competition in the leasing market will continue to intensify. The average rent in Shenzhen is expected to continue to decrease. However, this provides more options for the settled businesses, especially under the current cost reduction and efficiency increase strategy of the big Internet factories, there may be big factories to adjust their office space.