“With the continuous new supply during H1/2025, the average vacancy rate by quarter-end exceeded 40%. Despite resilience in the IT and service sectors, rental declines accelerated.”

JAMES MACDONALD, SAVILLS RESEARCH



Destocking driven by existing tenants

• In Q2/2025, Yuexiu IFC T5 was delivered, bringing 108,000 sqm new supply to the market. By quarter-end, the citywide office space remained at 3.13 million sqm.

• By demand side, quarterly new absorption was nearly 25,000 sqm. Total take-up in H1/2025 reached 32,000 sqm, up over 130% YoY. The service industry continued upgrade and opening activities.

• Leasing activities were driven by upgrade and relocation activities, which accounted for 59.0% and 22.4% respectively, and over 80% in total during H1/2025.

• By the end of Q2/2025, the average vacancy rate of Grade A office decreased by 1.3 ppts QoQ and 1.9 ppts YoY to 40.6%. The average Grade A office rent remained in the downward trend, recorded RMB 77.8 psm pmth, down 10.7% YoY and 2.3% QoQ.

• A total of 236,000 sqm new Grade A office supply is expected in H2/2025. Rents will still be on a downward path with a broader decrease of 9-10%.