“In 2024, annual new supply reached 35,000 sqm, with an over 70% YoY decrease, but net absorption declined YoY as well. By year end, the average vacancy rate was down to 38.2% and the rent decline accelerated throughout the year.”

JAMES MACDONALD, SAVILLS RESEARCH



Take-up ticks up with rental decline accelerating

• In 2024, the Wuhan Grade A office market merely saw the launch of World Fortune Center in the Optics Valley submarket, adding 35,000 sqm of new supply to the market, with a 78.4% YoY decline. By the end of Q4/2024, the citywide office stock reached 2.96 million sqm.

• 2024 net absorption reached 51,000 sqm, down 41.4% YoY. The demand was mainly driven by the robust service sector, accounting for 32.6%. The contribution from the manufacturing industry steadily increased.

• Rental decline accelerated in 2024, providing favorable business conditions for enterprises to upgrade and relocate. Upgrade and relocation demand climbed from 61.5% in 2023 to 70.5% in 2024.

• By the end of Q4/2024, the average vacancy rate of Grade A office decreased by 1.0 ppts YoY to 38.2%. In 2024, average Grade A office rent accelerated downward. By the end of 2024, the average rent of Grade A office has fallen to RMB81.3 psm pmth. A shrink in expansion led to a 9.0% decline in the rent index.

• It is expected that in 2025, the annual new supply of Grade A office will be over 500,000 sqm, showing an uptrend from 2024. The project entry may enhance the submarkets’ business capacities and intensify the market competition.