“Q4/2025 leasing activity improved noticeably, but the market remains structurally oversupplied, and further vacancy pressure is likely as new projects come online in 2026.” —— James Macdonald, Savills Research

Leasing Recovers, Risks Remain

• No new supply entered the market in Q4/2025. Shanghai’s Grade A office stock reached about 20.3 million sqm by year-end, up 3.0% YoY.

• Despite no new supply, net absorption rebounded to 124,100 sqm, up 44.1% QoQ in Q4/2025 and roughly double YoY.

• The vacancy rate fell 0.6 ppts QoQ in Q4/2025 to 23.6%, but rose 0.8 ppts YoY.

• Grade A rents declined 2.4% QoQ to RMB5.0 psm pday, down 15.4% YoY . Average rents are back at around 20-year lows and remain on a downtrend.

• Demand from consumer and retail-related occupiers stayed resilient through 2025, while local third-party office operators continued to expand.

• Landlords plan to deliver about 1.3 million sqm of new supply in 2026. Even with a gradual demand recovery, overall vacancy could still rise to around 25%.