Mainland office vacancy rates skyrocket

Business | Kevin Xu 18 Oct 2019

The vacancy rate in 17 major mainland cities reached 21.5 percent in the third quarter, its highest level since 2008, amidst a widening economic slowdown and supply glut, according to the commercial property consultant CBRE.

Overseas companies are waiting for US trade war hostilities to end before signing new leases, as skyscrapers built during the boom years create a supply wave. Cost-conscious tenants are also opting for cheaper buildings as the economy slows.

The news came as mainland developer China Overseas Grand Oceans (0081) revealed its operating profit for the first nine months of this year surged 90 percent to HK$6.8 billion driven by an increase in turnover.

Meanwhile, China reduced its holdings of US Treasuries by US$6.8 billion (HK$53.04 billion) to US$1.1035 trillion in August, the second consecutive month in which holdings dropped and following a slight drop of US$2.2 billion in July, according to US Treasury Department data.

Japan surpassed China to become the largest foreign holder of US Treasuries, after boosting its holdings in June by US$21.9 billion.

In August, Japan's holdings increased by US$43.9 billion to reach US$1.1747 trillion.

In currency markets, Commerzbank economist Zhou Hao said the yuan risks strengthening past 7 to the US dollar in the near term, months after it topped the symbolic level for the first time since the global financial crisis.

In other news, credit rating agency Moody's may stall plans to take control of China Chengxin International Credit Rating, the nation's largest rating company, amid regulatory inaction.

Moody's previously reached a framework agreement in March to increase its holding in Chengxin to more than 50 percent from 30 percent. The efforts were largely halted by Moody's failure to get regulatory clearance, according to reports.

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