09/09/2025

BIZ & FINANCE TUESDAY | SEPT 9, 2025

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China office developers offer sweeteners to attract tenants

the International Monetary Fund saying Riyadh needs a price over US$90 per barrel to balance its books. Saudi Arabia is in the midst of a costly economic transformation programme known as Vision 2030 that aims to wean the economy off oil dependency and is spending billions to boost sectors like tourism, entertainment and sports. – Reuters Microsoft cloud platform hit by cable cuts DUBAI: Global tech giant Microsoft on Sunday said network traffic for its Azure cloud computing platform was experiencing increased delays in parts of the Middle East due to “undersea fibre cuts” in the Red Sea. Microsoft did not provide an explanation for what caused the cuts to the submarine lines but noted its network had been affected since Saturday. “Network traffic that does not traverse through the Middle East is not impacted,” the company said in a statement. The internet access monitoring organisation NetBlocks noted that a series of submarine cable outages in the Red Sea has degraded internet connectivity in several countries, including in India and Pakistan. Global internet and telecom cables have followed shipping routes through the Red Sea, but there has been growing anxiety about the state of the lines after Yemen’s Huthi rebels began attacking passing merchant vessels in late 2023, in actions the group said was in solidarity with the Palestinians amid the Gaza war. The laying and operation of underwater cables have long been the preserve of a consortium of large telecoms operators, but internet giants have largely taken over in recent years as they strive to keep up with ballooning flows of data. About 1.4 million kilometres of fiber optic cables are laid on the ocean floor, enabling the provision of essential services such as trade, financial transactions, public services, digital health and education around the world. Damage to submarine cables is not uncommon. According to the International Cable Protection Committee, there are an average of 150 to 200 outages per year worldwide, or around three incidents a week. Fishing and anchoring is believed to be responsible for a vast majority recorded damage to the lines. Natural hazards to the cables also include ageing, abrasions and equipment failure. – AFP

effective role for government would be to support the broader economy rather than attempt to directly stimulate the office market. In the face of fierce competition, developers are offering rental concessions to keep leasing rates up. Hong Kong developer Hang Lung Properties, whose China office rental revenue dropped 5% in the first half from a year ago, said its assets in Shanghai faced the worst pressure because there was ample supply and rents had dropped. “If you want to retain tenants, you have to cut rents,” said CEO Weber Lo, who noted that few multinational firms were expanding in China and many were scouring for cheaper rents. Outside the office sector, state-owned logistics warehouse developer Shenzhen International, which counts Chinese e-commerce giant JD.Com and US retailer Walmart as clients, is facing a similar issue. “Our CEO Liu Zhengyu has been working very hard and visiting tenants every other week to maintain a good relationship and retain them,” chairman Li Haitao told an earnings conference last month. – Reuters

providing tenants with more flexible leases and operational services in order to raise their “stickiness”. “These services are as refined as air con, electric appliances, including electricity fees for charging EV cars,” said Liu Zhongliu, who oversees management of some of the company’s property assets. The company said the commercial real estate sector’s condition was more “severe” compared to the overall economy, and it would take time for the market to recover as it was under pressure from a “structural adjustment” due to insufficient demand and oversupply. “The market had gone through 30 to 40 years of fast growth. Now it will still need more correction; the policies will not reach their goal in one step,” said China Merchants Commercial REIT executive director Guo Jin.

o Demand sluggish due to corporate cost-cutting, multinationals shrinking

HONG KONG: Chinese commercial property developers are seeking to lure tenants with value-added services such as subsidies for charging electric vehicles in addition to lower rents, as they battle record-high vacancy rates across the country. Empty offices are increasingly common even in top cities such as the southern tech hub of Shenzhen and commercial capital Shanghai, as the sector grapples with sluggish demand due to corporate cost-cutting and multinational companies shrinking their presence.

challenging in the near term, with landlords relying on incentives and flexible lease structures to retain tenants,” said Savills Research Senior Director James MacDonald, citing continued new supply and softer occupier demand in those cities. Rents for grade-A offices in the four cities have dropped around 20% to 40% since 2020, with those in Beijing declining the most, according to Savills data. The world’s second-largest economy has so far avoided a sharp slowdown in part due to policy support, but markets are braced for weaker growth in the second half amid slowing exports, weak consumer confidence and a

Shenzhen reported the highest vacancy rate of 30.6% among the country’s four first-tier cities at end-June, according to real estate consultancy Savills, followed by 23.7% in Shanghai, 22.6% in Guangzhou and 19.6% in Beijing, even though working from home is far less common than in many Western markets. “We expect conditions to remain Abu Dhabi’s financial hub reports surge in active companies persistent property market downturn. State-owned China Merchants Commercial REIT, which reported a 16% drop in net property income in the first half, said in an earnings webcast in late August that it was To support the office market, some local authorities have introduced measures including rental subsidies, encouraging older office buildings to be repurposed into residential housing and halted new land sales for commercial development. Savills’ MacDonald said the most

ABU DHABI: Abu Dhabi’s financial hub yesterday posted a 42% year-on-year increase in registered entities in the first half of 2025, as global firms look to deepen their presence in the Gulf and gain proximity to the emirate’s powerful sovereign wealth funds. The Abu Dhabi Global Market also reported a 42% increase in its assets under management since last June, with the financial hub now home to 154 fund and asset managers managing a total of 209 funds. ADGM is a financial free zone built on English common law. Abu Dhabi, home to 90% of the country’s oil reserves, has been intensifying its push to diversify beyond hydrocarbons by leveraging its vast sovereign wealth funds, which collectively manage nearly US$2 trillion – more than any other city worldwide. The United Arab Emirates has become increasingly attractive to companies and high-net-worth individuals in recent years, thanks to its strong post-pandemic economic rebound, tax-free environment, and ease of doing business. Key entrants to ADGM in the first half of the year include Kimmeridge and Fortress Investment Group, with the latter signing a US$1 billion RIYADH: Saudi Arabia’s gross domestic product (GDP) grew 3.9% in the second quarter of 2025 driven by the non-oil sectors, according to government data estimates released yesterday. Non-oil activity grew by 4.6% compared to the same quarter last year, according to the Saudi General Authority for Statistics.

A view of the Abu Dhabi skyline. – REUTERSPIC

2,381 at the end of December. Neighbouring Dubai International Financial Centre reported a 25% year on-year rise in active companies, reaching 7,700 at the end of the first half. – Reuters

hedge fund Brevan Howard, one of the first global firms to open a headquarters in ADGM in 2023. ADGM said the number of companies with bases in the centre reached 2,972 as of June 30, up from

partnership with Abu Dhabi sovereign wealth fund Mubadala in May. In August, Lunate, an asset manager steered by UAE national security adviser Sheikh Tahnoun bin Zayed, acquired a minority stake in

Saudi Arabia’s second quarter GDP rises 3.9%

September and August and 411,000 bpd in July and June. The increases in output have led to a fall in oil prices of around 15% so far this year. Prices have not collapsed, however, trading at around US$65 a barrel, supported by Western sanctions on Russia and Iran. The lower oil prices are predicted to weigh on the Saudi economy, with

The Saudi-led Opec+ agreed to further raise oil production on Sunday, as the kingdom pushes to regain market share. The eight members of Opec+ agreed on Sunday in an online meeting to raise production from October by 137,000 barrels per day, much lower than the monthly increases of about 555,000 bpd for

Sectors like electricity, gas and water showed the highest growth followed by finance, insurance and business activities. The economy grew across all sectors with oil up 3.8% and government activities growing 0.6%. Oil activities showed largest growth compared to the first quarter, rising by 5.6%.