GRADE A office rents in Shanghai's Puxi rose the fastest in more than two years in the third quarter of 2010 amid strong demand to expand and upgrade from multinational companies.

Average rents for Grade A office buildings in Puxi jumped 6.6 percent to 7 yuan (US$1.05) per square meter per day in the July-September period, the fastest quarterly growth registered since early 2008, major international real estate services provider Jones Lang LaSalle said yesterday.

"Demand from multinational firms continued to grow as many of them resumed expansion after a two-year hiatus," said Anthony Couse, managing director of Jones Lang LaSalle Shanghai. "Foreign retailers were particularly active in the market as they secured larger, higher-quality office space to support their expansion of stores across the country."

International sportswear brand Puma leased 3,000 square meters in The Headquarters Building near the People's Square while another foreign retailer pre-leased 2,900 square meters in Henderson Metropolitan on Nanjing Road E. as both upgraded from Grade B offices.

The robust demand from multinational tenants has also boosted leasing activities for new Grade A buildings yet to be completed.

In the Jing'an Temple area, 1788 Eco City, a 35-story development by Sunpower group from Taiwan which is scheduled to be completed in April 2011, said last month that more than half of its spaces are already in late-stage negotiations and most of the potential tenants are multinational companies.

Across the Huangpu River in the Pudong New Area, the rise in rents slowed slightly to 3.2 percent quarter on quarter, setting average rents at 6.90 yuan per square meter per day. The Pudong market registered a smaller transaction volume than previous quarters but demand for the rest of the year remained significant.