While Internet finance firms and sharing economy are flourishing in China, they are under stricter scrutiny.
In the morning of October 21st, the police made an urgent inspection on"51 Credit Card", many executives and employees were taken away for investigation at the office in Xihu District, Hangzhou. Announced to close more P2P industries will lead to the rising number of vacant office spaces.
Many of P2P industries were facing insolvency in 2018. According to incomplete statistics, since September 30, 2019, there have been 5,785 out of the 6,698 P2P lending platforms suffering from problems.
The entire industry is facing a wave of insolvency. Since the beginning of this year, many Internet finance companies have moved out of Grade A office buildings. As a result, office vacancy rates have increased. Over 3,000 platforms crackdown in recent years, and the average office space is 1,000 square meters. Thus, it will lead to the vacant area of 3 million square meters in first- and second-tier cities such as Beijing, Shanghai, Hangzhou, Shenzhen and Chongqing. According to Colliers International, the net absorption of Grade A office buildings in the first half of 2019 was approximately 96,000 square meters, a year-on-year decrease of 69.6%.
It is noticed that since the fourth quarter of 2018, the vacancy rates in Beijing and Shanghai have continued to rise, but the stability is still superior to that of second-tier cities.
The head of Savills Davis North China market research department Li Xiang said that the average vacancy rate of the four first-tier cities in the north, Guangzhou and Shenzhen is between 8% and 12%, but the vacancy rate in second-tier cities such as Hangzhou, Chengdu, Chongqing, and Nanjing is in the range of 15% to 25%.
"This is mainly due to the industrial diversification of the second-tier cities and the proportion of the tertiary industry are much smaller than those of the first-tier cities," Li said.
"Not only Internet finance companies, but also other sharing-economy startups that rely on large scale financing are facing more critical qualification scrutiny," Li said. "With the domestic macroeconomic downturn, Grade A office buildings in the first-tier cities tend to choose those conservative enterprises with good financial status. The promising technology companies, such as artificial intelligence and speech recognition are developing vigorously. These enterprises will better attract customers to office buildings and help create quality products."
