Shanghai Figures Q2 2024

Leasing demand holds firm but continues to lag 2023 levels;
Investment demand strengthens for hotels and shopping malls

Office

This quarter saw the completion of four new office buildings providing a combined 213,679 sq. m. of space. Leasing demand improved compared to the previous quarter but continued to lag the same period of last year. Finance was the top driver of leasing demand, followed by TMT and business services. Overall vacancy rose by 0.3 pps q-o-q to 21.1%.

Retail

Xuhui Vanke Mall was the only new retail project completed this quarter. Net absorption stood at 70,382 sq. m., while citywide vacancy remained stable. F&B remained the primary source of leasing demand but the proportion of new leases in the retail category increased over the quarter.

Logistics

One new project providing 700,000 sq. m. was added in Q2 2024. Demand mainly originated from 3PLs, with an increase in short-term leasing transactions reflecting stronger demand for cost control and flexible lease terms. Net absorption was -157,035 sq. m. while vacancy increased to 26.5%, largely driven by new supply and lease surrenders.

Business Park

Four new business parks providing 270,888 sq. m. of space were released to the market in Q2 2024. Net absorption totalled 76,168 sq. m., leading to a rise in vacancy. Demand was led by consumer product manufacturing, industrial manufacturing, and TMT. Relocations remained prominent.

Investment

A total of 24 investment transactions worth a combined RMB 11.98 billion were completed in Q2 2024. Offices retained their status as the most popular asset class, closely followed by hotels, with retail in third place. Enterprise buyers accounted for more than 60% of investment volume, with nearly half of transactions being for investment purposes.