China’s commercial landlords and coworking operators are expected to a jump in occupancy rates due to the demand of unicorns in the area.
China’s domestic unicorns have grown from two at the end of 2013, to 82 by last January. According to Cushman & Wakefield, three out of every four unicorns are seeking to expand within their existing markets or new markets.
For example, ride-hailing service Didi-Chuxing’s staff grew 10-fold to 7,000 after merging with Kuaidi Dache in 2015.
“It is expected that those fast expanding unicorns in the region will become a major force for office space absorption in Mainland China in the coming years,” said Jonathan Wei, managing director, occupier services, Greater China at Cushman & Wakefield.
Business parks are seeing a big boost in leasings from these unicorns thanks to their close proximity to many universities in mainland China.
Still, Knight Frank executive director Thomas Lam said that coworking operators have grown quite fast with huge costs, so they are likely to slow down expansion until the market is filled up.
Despite this, taking up flexible office space makes the most sense for rapid growth companies as they can avoid the delays and costs of direct leasing.
