Office buildings are back to full capacity and have resumed normal operations. There is still widespread use of temperature scanners in office towers and indoor public spaces. Office buildings no longer require windows to be open for specified times to increase ventilation. Air conditioning is now back to normal. Bars, restaurants, and gyms are back to normal operating conditions but require registration. Most public areas still require a quick registration and you need to present your health QR code.

There are also additional relief measures being provided for small businesses in the form of loans but there are no additional measures or government directives pushing for more aggressive forms of rent-relief in commercial office buildings.

No restrictions on travel within Shanghai and almost no restrictions on travel from other Mainland Chinese cities to Shanghai. Restrictions have been reintroduced for a handful of areas that are considered at risk such as Wuhan. International travel entering Shanghai is still problematic, most foreign passport holders are not able to enter the Chinese mainland including from Hong Kong and Macau.

Occupiers are asking us for the likelihood of achieving short-term rent abatements and are leaning more towards renewals at friendlier rental terms for a standard lease term (3 Years). Occupiers that were renewing in place are asking to negotiate more favorable terms, particularly MNCs.

OCCUPIERS?
Occupiers were cancelling or postponing relocation plans and opting for short-term or even longer-term renewals instead. That situation is still relatively the same but planning and meetings for relocation plans are beginning to be back on.

LANDLORDS? DEVELOPERS / INVESTORS?

Developers are following the government’s lead in terms of regulations, enforcing work-place habits, and other operational details. International developers are generally unwilling and unreceptive to rent relief or offering better lease terms. While international developers are reviewing this engagement on a case by case basis, their unwillingness is intensified as the market is stabilizing

Occupiers may be able to negotiate more favorable lease terms for lease renewals. State Owned Enterprise landlords will likely be more willing to negotiate favorable terms than normal because of government directives. Occupiers will increasingly look for more flexible lease terms moving forward.

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