China's real estate market has entered a new era, where quality, resilience, and prudent growth are essential. In response to profound structural changes and a market under re-evaluation, Savills has released the Chinese Real Estate Market Outlook 2025. This report offers a clearer view of these shifts and outlines the adaptive strategies that market participants can adopt.

Shop: Value for money
Consumers are placing greater emphasis on emotional connections and value for money. Retailers operating non-standard formats are increasingly attuned to consumer preferences and are focused on providing a richer shopping experience. Prime cities remain the first choice for brand entry or store expansion, while lower-tier cities continue to be key drivers of consumption growth.

Work: Cost efficiency prioritised
Companies are increasingly prioritising cost efficiency, often through lease renegotiations. The reduction in rents has stimulated demand for upgrades. Other firms seek to optimise existing space, driving higher workstation utilisation rates, hot-desking, and greater efficiencies in layout design.

Store: Customization
New supply in the logistics market has slowed in 2024. Against the backdrop of a volatile global political situation and the overall decline in corporate profitability, companies are becoming more cautious with their budget allocations for heavy asset investments in logistics warehousing. "Built-to-suit leasing" is likely to emerge as the dominant model for new logistics developments.

Live: Moderate recovery underway
China's residential market has undergone significant transformation over the past four years. Relaxation policies are helping to stabilise the market and boost sales. In the leasing sector, companies are differentiating themselves by improved offerings and adopting strategic brand-building initiatives, as well as exploring ways to secure tenants by providing a broader range of locations and property grades to meet evolving needs.

Invest: Cautiously Seeking Opportunities
The constantly changing market fundamentals and uncertain market outlook make the rational allocation of funds and the pricing of investment targets difficult. Nevertheless, we expect the overall transaction volume in the investment market to slightly increase in 2025, benefiting from further eased liquidity and some improvement in market confidence. Medium- to long-term issues with regards to market fundamentals and the rising challenges of trade protectionism remain to be addressed.