“The citywide vacancy rate fell below 30% for the first time in two years in Q2/2026, supported by resilient leasing demand, limited new supply and continued office-to-hotel conversions. However, with more than 2 million sqm of new office space scheduled for completion in the second half of the year, leasing competition is expected to intensify, particularly in Nanshan.” ——Carlby Xie, Savills Research



Vacancy Dipped Below 30%

• One Grade A office project was completed in Q2/2026, adding 38,111 sqm of office GFA to the market.

• Continued office-to-hotel conversions partially offset the new supply, with Grade A office stock increasing 0.1% in Q2/2026 to 12.8 million sqm, up 4.5% YoY.

• Leasing activity remained resilient, supported by rising enquiry levels, site visits and lease completions.

• Net absorption totalled 247,765 sqm in the first half of 2026, broadly in line with the same period last year.

• The citywide vacancy rate fell 0.8 ppts in Q2/2026 to 29.3%, down 2.2 ppts YoY and below 30% for the first time in two years.

• Relocations accounted for more than 60% of identified leasing transactions, while new leases represented 21.7% of total activity, up 9.2 ppts YoY.

• Information technology, finance and professional services remained the primary sources of demand, with artificial intelligence, semiconductor, chip manufacturing and software companies driving leasing activity.

• Grade A office rents fell 0.4% in Q2/2026 to an average of RMB130.6 psm pmth, down 5.0% YoY on a rental index basis.