1、Sustained rental growth and low vacancy in H2 2018 Xander Gao Analyst | Research | South China In Q2 2018 the Guangzhou Grade A office average rent increased by 1.5% QOQ while the vacancy rate dropped by 1.2 percentage points to 3.9%, due to smooth economic growth and no new supply. We expect steady
2、 rental growth and a low vacancy rate through the end of 2018 due to limited new supply over H2 2018. Between 2019 and 2022, new supply equivalent to 51% of existing stock should trigger a steady increase in the vacancy rate. However, a large proportion of the new supply will be owner- occupied and
3、located in emerging office districts. We expect rent to continue growing in core areas, especially Pearl River New City (PRNC), the premier and largest submarket in Guangzhou. Hence, we believe rent should continue to increase moderately between 2019 and 2022. Since Pazhou will be the cluster of large technology enterprises and has kept its rental growth momentum, we suggest tenants who intend to