Illustration: Chen Xia/GT

International real estate consultancy DTZ released its 2015 Annual Occupier Outlook Wednesday. The report, which looks at conditions in office markets in major global cities, stated that Shanghai will become the best city for office rentals in the world by 2017 in terms of accessibility, availability and profitability.

Such predictions are hardly surprising by the current market conditions. Office space in Shanghai and other Chinese cities has grown quickly over recent years in response to the country's accelerated urbanization campaign. Investment demand in this corner of the real estate sector has also increased thanks to strains on the commercial property market and government efforts to rein in the residential property market.

Under the weight of government policies and China's decelerating economy, growth of overall real estate investment fell by 0.5 of a percentage point during the first 11 months of this year compared to the first 10 months, according to the data released by National Bureau of Statistics Friday. In the urban home market, oversupplies and pricing weakness have kept many prospective buyers out of the market, leaving some developers sitting on several years' worth of unsold inventory. In the commercial property market, runaway rental prices and the rise of e-commerce have many thinking twice about opening restaurants and retail businesses. Even in first-tier cities, many shopping centers have vacancy rates of close to 10 percent, according to consultants Cushman and Wakefield Research. In second-tier cities, vacancy is even higher; reaching 20 percent in some cases.

In comparison, China's offices have proven relatively resilient to negative pressures elsewhere in the market. Last year, investment in office building development reportedly reached 465.2 billion yuan ($75.19 billion), up 38.2 percent from 2012. Some 28.83 million square meters of office floor space were also sold in 2013, up 27.9 percent. Total sales amounted to 374.7 billion yuan during the period, up 35.1 percent on an annual basis, according to Askci, an industry research institute.

Rental prices are holding up as well. For example, the average rental price for grade-A office space in Beijing climbed to 387.62 yuan per square meter by the end of September, up 1.94 percent month-on-month and 2.89 percent year-on-year, according to DTZ figures. In Shenzhen, industry data found rents rising by over 4 percent per month during the third-quarter.

Although the overall picture of China's office market is one of strength, it is not entirely immune to the problems which are becoming increasingly evident in other parts of the real estate sector. For example, a total of 34 million square meters of grade-A office space were sitting vacant in 20 of China's top cities by the end of the first half year in 2013.

Nevertheless, there are signs that this issue is being resolved by the market. Beijing's grade-A vacancy rate reportedly dropped to 4.45 percent by the end of the third quarter, compared with 8.19 percent at the end of 2013. In second- and third-tier cities though, office vacancy rates remain high, owning to overinvestment and slack demand.

Of course, continued oversupplies could play right into the hands of some office renters and buyers, leaving them in a stronger position to negotiate favorable prices and other terms with owners. For other market participants as well, the office property industry could represent a safe haven for investors and developers looking to ride out the downturn which is now crimping demand across the sector.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn