The New York-based asset manager is marketing the property in northwestern Shanghai at a reduced rate to speed up the sale, according to the people, who asked not to be identified because the information is private.

A representative for BlackRock declined to comment.

Finding a buyer in China’s current commercial property market may be difficult, with other institutional investors offloading offices as the weak economy and oversupply weigh on the sector. Falling rents and a global trend to reduce exposure to office assets make such properties less appealing to potential investors.

In Shanghai, office rents fell to their lowest level in almost a decade last quarter, and they might decline further this year due to a growing supply pipeline, according to Colliers International.

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Prime offices in Beijing and Shanghai traded at capitalisation rates of about 5 per cent last quarter, the highest in more than a decade, Colliers data shows. A rise in the cap rate, which is a property’s net income divided by the transaction price, usually signals a decline in real estate values.

Grade A offices in Shanghai and Beijing used to be sought after by global real estate funds, making them more attractive than those in New York and London. Even in recent years, they largely avoided the challenges crushing global peers, such as rising interest rates and hybrid work arrangements.

But institutional investors have been selling such assets as prospects for the Chinese economy and oversupply weigh on the sector. That has added to the gloom in the country’s real estate industry, which has been grappling with an unprecedented slowdown in its residential market since 2021.

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Part of the drag on prices has been caused by global real estate funds that faced pressure to exit their investments after Covid-19 delayed the process, said Jimmy Gu, a deputy managing director and co-head of capital markets and investment services at Colliers. Falling rents and a global trend to pare exposure to office assets also contributed.

In Shanghai, office rents shrank to the lowest in almost a decade last quarter, and they may decline further this year on a bigger supply pipeline, according to Colliers. In Beijing, net absorption of office space – a measure of occupancy – has only recovered to a third of the pre-pandemic level, signalling weak demand.