“Growing supply, particularly from subsidised housing, is reshaping the market and forcing operators to compete more on service and efficiency.” —— James Macdonald, RESEARCH



Competition drives product differentiation

•Two serviced apartment projects were launched in Q1/2026—Swissôtel Living Shanghai Hongqiao and Somerset Waigaoqiao—adding 427 units.

•One premium multifamily project, COZI Lianyang in Pudong, opened during the quarter, focusing on higher-end one-bedroom units.

•Serviced apartment vacancy fell 0.3 ppts in Q1/2026 to 18.9%. Luxury vacancy fell 2.4 ppts to 20.8%, while premium multifamily vacancy fell 0.3 ppts to 20.1%.

•Serviced apartment rents fell 0.1% in Q1/2026 to RMB271.3 psm pmth. Luxury rents rose 1.0% to RMB389.7 psm pmth.

•Projects such as Jessfield Parkside, THE ONE Shanghai Downtown and Arcadia Shanghai show how operators are upgrading buildings and rebranding to support rents.

•Multifamily operators are focusing more on improving existing projects and keeping tenants. The serviced apartment market is splitting, with high-end projects holding up better, while mass-market projects remain under pressure.