(Yicai Global) April 19 -- The demand for premium office space in the Chinese economic powerhouse of Shenzhen slowed in the first quarter and 22.2 percent of high-end offices lay empty as companies adopt a wait-and-see attitude amid new Covid-19 outbreaks and other challenges, Securities Times reported today.

The vacancy rate of A-grade office buildings in Shenzhen advanced 2.9 percentage points in the three months ended March 31 from the previous quarter, the report said, citing research by US commercial real estate services firm Cushman & Wakefield. The rate was as low as 19 percent at one point last year.

The leasing market was not vibrant in the first quarter, and some companies are taking a wait-and-see attitude in terms of expanding their business and increasing their headcount in the short term, said Li Wenjie, director of Jones Lang LaSalle’s Shenzhen commercial real estate department. There is also a demand lag for new office buildings, which is especially true for Hong Kong-funded firms.

The net take-up of top-tier office space tumbled more than 60 percent both from the previous quarter and from the same period a year ago to 110,000 square meters, according to data from US commercial property services company Jones Lang LaSalle.

Rents in Excellence Times Square in the central business district have slumped to between CNY150 (USD24) and CNY220 per square meter a month from a height of CNY280 (USD44) last year, a local office leasing agent said.

The municipal government has been issuing polices to cut rents and grant subsidies to help tenants of state-owned office buildings get back on their feet after a week-long lockdown last month.

Financing difficulties in the real estate sector also mean that many developers are trying to sell their properties to ease liquidity pressure, a staff member at a real estate agency said.

Despite this, there have been some eye-catching transactions in the city recently, according to Chicago-based Jones Lang LaSalle. For example, a well-known insurer has leased an office space of more than 10,000 square meters in Qianhai district. And two tech giants are renting an area of 10,000 square meters in the Houhai part of town.

Editor: Kim Taylor