“The residential leasing market is becoming increasingly segmented. High-end projects continue to demonstrate resilience, while operators in the mass market face intensifying competition from affordable rental housing.” – James Macdonald, Savills Research



High-End Outperforms as Competition Intensifies

• Bundo West (西岸中环汇Bundo), part of Hongkong Land's West Bund Financial Hub, launched its first phase of 337 units in Q2/2026, with a total of 633 units planned.

• Base LITE Anbo Road (佰舍LITE-安波路店), converted from a commercial property in Yangpu's Wujiaochang area, added 463 premium multifamily units.

• Serviced apartment vacancy fell 0.7 ppts in Q2/2026 to 17.7%, with luxury vacancy declining 1.8 ppts to 18.8%. Premium multifamily vacancy also fell 0.7 ppts to 19.2%.

• Serviced apartment rents fell 1.3% in Q2/2026 to an average of RMB262.0 psm pmth, while luxury rents rose 1.6% to RMB398.6 psm pmth.

• Growing demand from tenants in AI, biotechnology and new energy industries is supporting the high-end segment, which is expected to remain resilient throughout the year.

• Affordable rental housing, offering newer products at lower rents, is attracting young white-collar tenants and eroding the value proposition of lower-end apartments. Operators will need to differentiate through enhanced service offerings and more targeted tenant positioning.