“Despite challenges, Hangzhou’s focus on cross-border live streaming, e-commerce, and platform companies, along with the development of a global payment centre and exploration of MICE industry opportunities, plays to its strengths and is expected to drive demand both directly and indirectly through related industries.”

JAMES MACDONALD, SAVILLS RESEARCH



Ample Supply Expected in 2025

• Hangzhou’s Grade A office market received the only two new projects in the year, with a total of 92,000 sqm of new supply. Total Grade A office stock reached 2.75 million sqm.

• Net take-up was recorded 20,400 sqm in Q4/2024, down QoQ and YoY. The 79,000 sqm of whole-year take-up is only half of FY2023.

• Huanglong and Qianjiang New City (QJNC) contributed 70% of the net absorption in 2024. Meanwhile, Qingchun Road and Future Sci-tech City recorded office space handed back to the market.

• While supply level declined in the year, new letting growth remained weak compared with the past, resulting in a QoQ increase of 1.7 ppts in vacancy rates, to 27.5%, down 0.5 ppts YoY.

• Landlords offer more preferential measures at year end to sprint annual targets. Grade A office rents fell 3.0% in Q4/2024 to RMB4.2 psm pday. Rents fell by 6.8% in the year, with the largest fall (-11.6%) in emerging locations.

• Financial, professional services and consuming companies remained positive in leasing activities, but in limited numbers and sizes compared to 2022-2023.

• Several quality new projects in 2025 are anticipated to stimulate a wave of upgrading demand from older ones. For tenants who require specific floor/unit type/orientation, matched products should be locked early in case of smaller room for rental discounts on a satisfactory pre-lease rate.