Shanghai Figures Q2 2022

Strict pandemic controls weigh on leasing and investment momentum

Office

One new building - Financial Street Joy Center Tower A – was completed in Q2 2022, providing a total of 75,055 sq. m. of new office space. Net absorption fell sharply over the quarter, with the bulk of leasing activity occurring after lockdown measures were eased in June. Demand was driven by the finance sector. Rents fell by 0.1% q-o-q due to rising vacancy and lower rents in older projects.

Retail

No new supply was delivered this quarter as the citywide lockdown delayed the completion of several new projects. Fashion retailers dominated leasing activity in Q2 2022 while F&B expansion slowed and numerous restaurants went out of business due to measures to contain the pandemic.

Logistics

Two new projects providing a combined 149,216 sq. m. of space were added in Q2 2022. Net absorption rose thanks to short-term expansion from fresh food e-commerce platforms and electric vehicle brands. Overall vacancy fell slightly to 8.5% while rents increased by a further 0.1% q-o-q.

Business Park

No new projects were launched this quarter while take-up totaled 10,558 sq. m. Activity was led by TMT firms, which accounted for 46% of leasing demand. Rents grew by 0.1% q-o-q.

Investment

A total of 11 deals worth a combined RMB 20.1 billion were completed in Q2 2022, representing a decline in investment volume of 11.1% q-o-q. Demand was underpinned by domestic owner-occupiers, with end-users accounting for 55% of investment volume. Domestic buyers’ share of the total remained high at 73%.