Shanghai sees increase in rental demand for commercial office space

Shanghai experienced a significant recovery in rental demand for commercial office buildings in the fourth quarter of 2025.

A landmark project in the heart of Shanghai, the Pacific Xintiandi Commercial Center spans some 390,000 square meters and features three commercial office buildings. Situated in one of the city's busiest commercial districts, the project has already achieved over 60 percent occupancy, primarily attracting leading and renowned international companies.

"Because the Huangpu District is a core CBD area. So, it's not like one or two single industries we are focusing [on]. Instead, we have a lot of top-tier companies from different industries," said Bruce Dai, deputy general manager of the office business management with Shui On Xintiandi.

Data from real estate consultancy Knight Frank show that 63 percent of the firms renting offices in Shanghai in the fourth quarter of 2025 were domestic firms, up four percentage points from a year earlier. However, in core areas like Xintiandi, international companies remain a major renting force.

"The completion of the office part was in 2024. We only took one and half a year to lease out the whole three office buildings with an 65 (-percent)-average occupancy rate. So I think we are doing pretty well facing the challenging market," Dai said.

Shanghai's office building market has indeed been challenging. The city's net absorption in Grade-A office buildings, which refers to net change in occupied space, dropped by nearly 11 percent in 2025 from a year earlier. Net absorption recovered in the fourth quarter of 2025, jumping by 9.3 percent quarter on quarter.

"We think this is an early sign showing the market recovery backed by the resilience of the Chinese economy. So if you look at the supply side, the last quarter's new supply recorded at 216,000 square meters, it was also up by 55 percent. So it pushed up the vacancy rate by 0.5 percent and reach to a historic high at 23.8 percent. This marginal improvement is actually showing the tenant demand is beginning to stabilize," said Virginia Huang, managing director of North and East China, Knight Frank.

Shanghai sees increase in rental demand for commercial office space

China has been maintaining stable economic growth against the backdrop of mounting pressures, experts have said.

China's gross domestic product (GDP) grew 5 percent year on year in 2025, meeting the annual target of around 5 percent, official data showed Monday.

China's GDP reached a record of 140.1879 trillion yuan (about 20.01 trillion U.S. dollars) last year, data from the National Bureau of Statistics (NBS) revealed.

Despite a complex domestic and external environment, the economy advanced under pressure, achieving fresh progress in high-quality development, the NBS noted.

"In 2025, China's economy achieved stable growth, forged ahead under pressure, and advanced in quality and innovation. Our economic growth rate reached five percent in the year. In terms of qualitative improvement, technological innovations delivered bright spots one after another, exports grew in adversity and improvements in living standards were tangible. Against the backdrop of mounting external pressures and various difficulties and challenges, achieving such results was no easy task," said Huang Hanquan, head of the Macroeconomic Research Institute affiliated to the National Development and Reform Commission -- China's top economic planner.

China's value-added industrial output, an important economic indicator, expanded 5.9 percent year-on-year in 2025, the NBS said.

The retail sales of consumer goods, a major indicator of the country's consumption strength, climbed 3.7 percent year-on-year in 2025. The country's per capita disposable income went up 5 percent year-on-year in nominal terms in 2025, data from the NBS showed.

"China maintained stable economic growth amid a sluggish global economic environment. Accounting for about 17 percent of the global economy, China contributed about 30 percent of the world's economic growth, making it a major engine for global economic development," said Wei Chu, dean of the School of Applied Economics of Renmin University of China.

China advances with stable growth despite pressure: experts