ASIA PACIFIC OUTLOOK 2025

SHENZHEN

KEY MESSAGES

Supply

Demand

Rents

Key Outlook

The domestic economy is expected to recover gradually, but risks in the external environment still exist, and in turn it will take some time for office leasing demand to pick up. Ahead, it is foreseeable that lower rents, longer rent-free periods and customised fit-out services will be the preferred mechanisms employed by landlords to attract tenants in the coming few years.

Approximately280,000 sq m of new office supply is slated to enter Shenzhen's Grade A office market in 2024.

The delayed entry of new projects coupled with soft demand has resulted in weak growth in net absorption in 2024, less than half of that seen in 2023. China's economic stimulus package may contribute to the recovery of office leasing demand in 2025. In addition, with the completion of headquarters buildings, owner - occupation will bolster net absorption. However, the vacancy rate is expected to remain on an upward trend in the coming years as supply will still increase substantially.

Citywide average rents declined further in 2024, primarily driven by weak demand.

The downward trend in rents is expected to continue, with related leasing expenses also set to be adjusted under the pressure of vacancy.

Given the large volume of office space under construction, stock is expected to climb significantly to 9.5 million sq m in 2025. The market will see a peak in new supply with around 1.26 million sq m of new supply completing in 2026, pushing total stock to 10.71 million sq m.

Cushman & Wakefield

ASIA PACIFIC OUTLOOK 2025