Aerial photo taken on Sept 12, 2020 shows a view of Nanshan district of Shenzhen, South China's Guangdong province. (Photo: Xinhua)

Rental demand for Grade-A offices in Shenzhen saw a steady increase in the third quarter, as more businesses chose to set up their South China office in the city, according to international real estate services provider Savills.

TMT (technology, media, telecoms), finance, professional services and real estate were the four sectors that showed the strongest demand for office space, it said.

"Businesses in sectors like TMT are going through a stage of expansion and need to expand their physical presence. Shenzhen, with a promising outlook, has become one of the first choices for them to set up their offices in South China," said Carlby Xie, head of southern China research at Savills. "Therefore, from the demand side, we expect Shenzhen’s Grade-A office market to maintain a positive development trend."

Despite growing demand, there is still an oversupply of offices on the market. According to Savills, 315,000 square meters of newly added Grade-A offices came into the market in the third quarter, bringing the total amount to over 8.12 million square meters.

China unveiled on Sunday a new comprehensive reform plan for Shenzhen to promote high-quality development and build a pilot demonstration area of socialism with Chinese characteristics.

Xie said the plan will bring fresh development opportunities for various industries and attract more enterprises to settle there. That will help ease the pressure of oversupply of offices and the market is expected to achieve a supply-demand balance in the medium and long term, he said.

The supportive policies from the central government will also boost real estate investment in Shenzhen, he added.

Average rental prices of Grade-A offices in Shenzhen remained flat at 192.4 yuan ($28.6) per square meter per month as of the end of September, only down 0.2 percent quarter-on-quarter.