“Landlords remained proactive in attracting tenants and pursuing market digestions in the face of persistently challenging market conditions.”

CARLBY XIE, SAVILLS RESEARCH

New supply gap in Q3

• Despite the prudent leasing sentiment, local government made continual efforts to attract investment and strengthen market confidence. Meanwhile, landlords implemented more positive leasing strategies to stimulate market digestion.

• No new supply was completed in Q3/2024, and the total stock remained at 7.1 million sqm by quarter end.

• Lease renewals and relocations continued to dominate the leasing market in Q3/2024, taking up 74.8% of the total quarterly leases.

• The citywide vacancy rate edged down by 0.4 ppt QoQ to 18.1% by end-Q3/2024.

• Finance industry outperformed others in terms of leasing transaction volumes, contributing 16.3% to the quarter new leases, while consumer services industry achieved the largest QoQ increment in transaction area, concluding several headline leasing deals.

• The citywide average rent decreased to RMB139.1 psm pmth by end-Q3/2024, with rental index down 0.7% QoQ and 4.8% YoY.

• Due to intensified leasing competition, landlords are expected to maintain or further sharpen their competitive edges to achieve higher occupancy rates by year’s end.