”Adjustments to several large-format leisure and entertainment units pushed market vacancy higher in Q2/2026.”— Chester Zhang, Savills Research



Pragmatism Shapes Consumer Spending

• Shanghai's retail sales of consumer goods returned to negative YoY growth in April after a brief recovery, highlighting continued weakness in consumer spending.

• First-floor rents in urban shopping centres fell 0.2% in Q2/2026, down 1.4% YoY.

• The vacancy rate rose 0.5 ppts to 11.1% in Q2/2026, ending a seven-quarter decline and standing 0.1 ppts higher than a year earlier.

• The increase in the vacancy rate was driven mainly by the departure of large-format entertainment tenants and project repositioning. Although leasing activity improved, it was not enough to offset the loss of larger occupiers.

• Performance across Puxi submarkets remained mixed. The vacancy rate on Nanjing Road (W) fell to its lowest level in a decade, while Changfeng recorded its highest vacancy rate in almost ten years.

• Prisma in Jinqiao, the largest shopping centre to open in Pudong in nearly a decade, opened in the second quarter, increasing competition for nearby projects.