Shanghai Figures Q3 2024

Focus on cost efficiency constrains office and business park demand; retail leasing activity improves along with new flagship store openings

 

Office

This quarter saw the completion of two new office buildings providing a combined 158,620 sq. m. of space. The finance sector, led by Insurance firms and funds, continued to take the lead, followed by TMT and consumer product manufacturing. Net absorption slowed over the quarter, pushing up vacancy by 0.4 pps q-o-q to 21.5%.

 

Retail

One new project, LIVAT mall, came on stream in Q3 2024. Citywide net absorption totalled 153,000 sq. m., while the vacancy rate rose to 8.2%. By category, F&B remained the largest source of demand. The period saw several apparel brands open their first stores in the city, pushing up the fashion sector’s share of overall leasing volume.

 

Logistics

One new project providing 74,181 sq. m. was added in Q3 2024, pushing up y-t-d supply to 1 million sq. m.. 3PLs accounted for 66% of leasing volume, with supply chain & contract logistics; express; freight forwarders; and cold chain firms most active. The addition of new supply pulled down rents over the quarter.

 

Business Park

The completion of Golden Cycle (Jinqiao) and LabBay (Zhangjiang) provided about 61,913 sq. m. of new stock this quarter. Net absorption reached 42,646 sq. m. and vacancy was largely unchanged. New leasing demand was driven mainly by TMT, industrial manufacturing, and life sciences companies.

 

Investment

A total of 36 investment transactions worth a combined RMB 21.74 billion were completed in Q3 2024. Investment sentiment strengthened over the quarter, with investment-oriented deals accounting for more than 90% of total transaction volume. Despite their share of overall investment falling over the quarter, office buildings remained the most traded asset class.