China Research

"Shenzhen continues to distinguish itself as a launch market for emerging domestic brands seeking to establish flagship and first-store locations."

"The citywide vacancy rate fell below 30% for the first time in two years in Q2/2026, supported by resilient leasing demand, limited new supply and continued office-to-hotel conversions. However, with more than 2 million sqm of new office space scheduled for completion in the second half of the year, leasing competition is expected to intensify, particularly in Nanshan."

"As consumer preferences continue to evolve, shopping centres are investing in better brands and experiences to attract footfall and encourage repeat visits."

"The continued improvement in leasing demand has supported Beijing's office market. However, a large volume of new supply in H2/2026 will present new challenges for landlords."

"KIC Corporate Avenue added new supply to the market, while leasing activity improved during the quarter, supported by relocations and upgrades. Rents remain under pressure, though the pace of decline is easing."

"China’s real estate market enters 2026 in a state of deep reassessment. Four years of subdued leasing, soft sales absorption, weaker footfall, rising vacancies,cautious capital, and persistent debt strain have pushed every asset class into a defensive posture. The old model—relying on scale, momentum, and rising prices—no longer offers a path forward. What the sector faces today is not simply cyclical weakness, but a structural shift in expectations, business models, and economic purpose. The only sustainable response is to break the cycle of decline: the cycle in which cost-cutting erodes service quality, eroded service quality weakens demand, and weaker demand triggers yet more cost-cutting. This downward spiral has reached its limit."

"In 2025, annual new supply reached 358,000 sqm, marking a sharp YoY increase. By year-end, the average vacancy rate rose to 42.7%, a new record high, while the pace of rental correction accelerated through the year."

"This report analyses demand trends across ten key tenant industries and incorporates in-depth insights from local market researchers in ten major cities. Combined with the strategic recommendations and opportunity areas presented in this report—and supported by comparative case studies from other Asian markets—our aim is to help stakeholders collaborate towards building a healthier and more sustainable office market ecosystem."

"Shanghai’s retail scene is undergoing a quiet transformation. Rather than pursuing endless expansion, major brands are consolidating into flagship locations that can better express identity and experience. These core sites are becoming stages for brand reinvention and storytelling."

"The industry is moving from broad classifications to more refined tenant profiling. Operators are tailoring products around lifestyle, spending patterns, and quality expectations."