The stable development of the service industry in Guangzhou, capital of Guangdong province, along with the development of the Guangdong-Hong Kong-Macao Greater Bay Area, will increase demand for Grade-A offices in the southern Chinese city in 2020, according to an industrial report.

The report from Colliers International — a global real estate services and investment management company — estimated the rental price of Grade-A offices in Guangzhou will remain stable, following increased supply of local offices.

According to Alan Fung, managing director of Colliers International (South China), the net absorption of Grade-A offices in the city will increase, thanks to new rental offices.

"Though the services sector in Guangzhou grew steadily in 2019, the lack of new office supply constrained overall net absorption throughout the year," Fung said.

The net absorption of Grade-A offices in the first three quarters of 2019 dropped 64 percent year-on-year partially due to lack of new supply, according to the report.

According to the report, 66 percent of the new supply of Grade-A offices in Guangzhou was completed in the fourth quarter of 2019.

"We believe the new supply will provide more options for tenants, increasing leasing activities" Fung said.

More than 894,000 square meters of Grade-A office supply are scheduled to be completed in 2020, surpassing the total supply from 2017 to 2019 by 51 percent.