An exodus of tenants from offices in Shanghai and Beijing, combined with supply in the pipeline, could drive vacancy rates as high as 40% in some locations and drag rents down as much as 50 per cent from their peak levels by 2011, analysts are warning.

'The outlook for office rents in Shanghai and Beijing is crystal clear. A massive excess supply situation is building up, which will result in rents crashing by 30-50%,' said Aaron Fischer, the head of Asian property and gaming research at brokerage and investment bank CLSA.

South China Morning Post