China Figures Q1 2024

OFFICE

Around 1.3 million sq. m. of new office supply came on stream in Q1 2024, an increase of 6% q-o-q and 51% y-o-y. Seasonal factors and more cautious decision-making ensured nationwide net absorption fell by 44% q-o-q to 540,000 sq. m. in Q1 2024, although this represented y-o-y growth of 60% due to Q1 2023’s low base. Nationwide office vacancy rose by 0.3-pps. q-o-q to 24.8%, marking an historical high. Nationwide average face rents dropped by 1.2% q-o-q. 


RETAIL

New retail supply totalled 410,000 sq. m. in Q1 2024, a decline of 84% y-o-y. Net absorption reached 470,000 sq. m., an increase of 82% y-o-y. The further improvement in the supply and demand structure ensured overall vacancy fell for a third consecutive quarter, dropping 0.2-pps. q-o-q to 8.4%. Average nationwide ground floor shopping mall rents were unchanged and now appear to have bottomed out.


LOGISTICS

National warehouse net absorption grew by 4% y-o-y to 1.47 million sq. m., underpinned by steady expansion by cross-border e-commerce, Third-Party Logistics (3PL) and manufacturing firms. New supply totalled 1.53 million sq. m., a sharp decline on both a q-o-q and y-o-y basis, dragging down vacancy by 0.3-pps. q-o-q to 21.6%. The nationwide rental decline accelerated amid pressure from the current supply peak and continued destocking.


INVESTMENT

Commercial real estate investment volume totalled RMB 44.7 billion in Q1 2024, representing a decline of 37% q-o-q and 23% y-o-y. Activity was led by purchases by domestic corporations and developers. Institutions and property funds remained cautious, accounting for just 17% of total transaction volume.