“Hangzhou authorities continue to support emerging businesses with subsidies for advanced industries, cultural export promotion, and platform oversight.”

JAMES MACDONALD, SAVILLS RESEARCH



Growing Demand from AI-enabled Sectors

• No new projects were launched in Q3/2025, keeping total Grade A office stock at 2.9 mn sqm.

• 40,000 sqm of space was absorbed in Q3/2025, driven by sustained demand from tech firms and limited downsizing activity.

• YTD absorption reached 82,000 sqm, exceeding the FY2024 total of 79,000 sqm, supported by resilient leasing in the finance, professional services, and tech sectors.

• Rapid expansion of AI-driven virtual influencer and livestreaming industries is generating new office demand, particularly among firms focused on digital content and automation technologies.

• Citywide vacancy fell 1.4 ppts QoQ to 27.2%, with declines recorded across most submarkets.

• Grade A rents edged down 0.4% QoQ to RMB 4.0 psm pday, representing a 6.8% YoY decrease.

• A significant 553,000 sqm of new supply scheduled for completion in Q4/2025 will expand total stock by 24% YoY, likely exerting downward pressure on occupancy and rental levels toward year-end.