Hangzhou is harnessing its intangible strengths to drive tech innovation and economic growth, reinforcing its position as a leader in both China’s and the global sci-tech innovation landscape.

JAMES MACDONALD, SAVILLS RESEARCH



Vacancy rates decline

• No new projects entered the market in Q1/2025, keeping the city’s total Grade A office stock at 2.8 million sqm by the end of the quarter.

• Net take-up reached 32,700 sqm in Q1/2025, up 60% QoQ and 67% higher than the 2024 quarterly average. However, companies remain cautious when committing to new leases.

• Financial, professional services, and tech companies continue to be active in leasing, while consumer companies show signs of recovery.

• Thanks to the temporary supply pause, the citywide Grade A office vacancy rate decreased by 1.2 ppts in Q1/2025 to 26.3%, a 1.4 ppt drop YoY.

• While the overall vacancy rate fluctuates, leading projects by professional developers—especially in mixed-use commercial complexes—showed better tenant retention, maintaining occupancy rates of 90% or higher.

• Citywide Grade A office rents fell by 1.6% in Q1/2025 to an average of RMB4.1 per sqm per day, marking a 7.4% YoY decline.

• The new direct rail link between Hangzhou West and Shanghai Hongqiao is expected to accelerate business flows between the two cities, while emerging areas like Hangzhou Yuncheng will absorb spillover industries and relocation demand.