Shanghai's languishing office leasing market is looking to local companies for a boost as foreign financial institutions remain on the sidelines waiting for clear signs that the global economic downturn is coming to an end.

But signs pointed to a continued slide in rentals as new space came on to an oversupplied market already suffering from high vacancy rates, warned analysts.

Lina Wong, the managing director at Colliers International's east and southwest China division, said most of the recent leasing deals were done by local financial institutions seeking to expand their office space. By contrast, just a few deals were done by foreign financial institutions that relocated to new office buildings but with office space remaining the same.

South China Morning Post