A shortage of demand in high-price prime-area properties has caused Shanghai's shop rentals to correct in the past two months, which might restrain investments in the city's commercial space, according to analysts.

　　Average daily rentals for prime shopping areas slid 1.8 percent to 22 yuan (US.65) per square meter in February, according to a market survey by a real estate consulting company, Centaline Property. Daily rentals in decentralized areas declined 1.4 percent to 6.9 yuan per square meter.

　　Deng Wei, a real estate researcher at Shanghai University of Finance and Economics, said demand had shrunk due to the excessively high rentals being asked.

　　He added that it was time investments in retail space be scaled back.

　　"Rentals in prime location have been falling in the past two to three months, and that would lead to a chain effect in the whole city's commercial space," Deng said.

　　Property prices in prime commercial locations dropped 3.8 percent to 32,432 yuan per square meter in February, said Centaline's report. Decentralized shopping areas also recorded an 11-percent price decline, while that for suburban areas shrank 4.2 percent.

　　Shanghai's prime retail areas include Nanjing Road, Huaihai Road, Sichuan Road and the Xujiahui area. Per-square-meter price for shopping space along Tianyaoqiao Road in Xujiahui averages 50,000 yuan.

　　The price of Shanghai's commercial space has been increasing for more than a year, as high yields attracted investors. The boom started in 1997, which saw more businesses started by individuals.

　　Last year, investments in Shanghai's commercial property attracted annual return of 10 to 14 percent, while the return from residential space was between 5 and 8 percent.

　　"Attracted by the high returns, people rushed to buy in the past year," said Zhou Gang, sales manager of Shangfang Store Service and Network Co Ltd, a property agency.

　　But Zhou is optimistic over the short-term prospect, citing an expected retail sales boom during the coming Labor Day weeklong holiday that would support shop rentals to some extent.

　　"Retail sales stemming from the weeklong holiday may promise strong growth," Zhou said. "Meanwhile, Shanghai's dynamic economic growth has also ushered in another flood of investment in retail and restaurant businesses."