Shanghai MarketView_Q3 2021

October 21, 2021

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Investment Volume Remains High As Office Net Absorption Sets New Benchmark



Net absorption reached an historical high in Q3 2021 thanks to a wave of relocations and expansions by TMT and pharmaceutical occupiers. Strong leasing momentum ensured asking and effective rents rose by 0.6% and 0.8%, respectively, with growth led by New Bund and Nanjing West Rd.



Three new shopping malls were delivered this quarter, adding 432,000 sq. m. of new retail space to the market. F&B retailers dominated leasing demand, accounting for 39% of total space leased in Q3 2021. The fashion category accounted for 24% of leasing volume, with significant demand originating from women’s wear and sports brands.



No new logistics supply came on stream in Q3 2021. 3PLs continued to dominate leasing demand, with Songjiang, Fengxian and Jinshan recording a steady flow of new leases and expansions. Robust demand and limited availability in most submarkets ensured overall vacancy declined and overall rents rose.



Strong leaving activity pushed up net absorption to 365,000 sq. m., bringing the year-to-date (y-t-d) figure to a level slightly below the record set in 2015.



Shanghai remained the country’s most buoyant investment market, registering 25 en-bloc deals worth a combined total of RMB 21.87 billion in Q3 2021. Despite a q-o-q slowdown in investment volume, the y-t-d figure reached RMB 67.8 billion, just below last year’s full-year total.