“Given the increased options for tenants, landlords of existing projects must focus on amenities and services to differentiate themselves, including proactive tenant engagement and greater responsiveness to client needs.”

JAMES MACDONALD, SAVILLS RESEARCH



Steadily recovering demand, coupled with an absence of new supply, dragged vacancy rates down by 1.2 ppts in 1H/2024.

• No new Grade A supply was handed over in 1H/2024, leaving the total stock at 2.7 mn sqm.

• Net absorption reached 24,100 sqm in Q2/2024, reflecting an improving business environment. Huanglong and Qianjiang New City contributed the largest net absorption in 1H/2024.

• Recovering demand combined with an absence of supply resulted in vacancy rates falling 0.9 ppt in Q2/2024 to 26.8% down 1.5 ppt YoY.

• Grade A office rents fell 1.5% in Q2/2024, to an average of RMB4.4 psm pday, with primary rents down just 0.7%, underpinned by relatively stable demand.

• Landlords should adjust their strategies to capitalize on opportunities in growth sectors, such as AI and intelligent computing, while mitigating risks associated with industries experiencing slowdowns.

• Hangzhou’s event-driven economy, and the linkage of “performance, exhibitions, and travel”, is expected to create economic benefits and contribute to increased office demand.