2026-07-29-莱坊-Shanghai_Office_Market_Report_Q2_2026_6页_1mb

Shanghai Grade-A Office Market Report Summary (Q2 2026)

Core Content

This report provides an overview of the Shanghai Grade-A office market in Q2 2026, focusing on supply and demand dynamics, rental trends, vacancy rates, and the investment market.

Main Trends and Insights

Supply and Demand

• Supply: New supply in Q2 was approximately 69,000 sqm, a significant decrease from Q1.
• Demand: Leasing activity remained firm, with net absorption rising by 51% QoQ to 209,314 sqm.
• Vacancy Rate: The vacancy rate fell by 0.7 percentage points to 23.5%, indicating a recovery in market demand.
• Rental Trends: Average rents continued to decline, but the pace of decline narrowed to 1.9% QoQ, ending at RMB5.81 per sqm per day.

Leasing Activity

• Occupier Behavior: Occupiers in the technology, biopharmaceutical, financial, and retail sectors drove leasing demand.
• Transaction Size: The share of mid-sized deals (1,000–3,000 sqm) increased by seven percentage points QoQ, while larger transactions (above 5,000 sqm) also rebounded.
• Core Submarkets: Little Lujiazui, Nanjing West Road, and Huaihai Middle Road showed greater rental resilience, with more moderate rent adjustments.
• Emerging Submarkets: Qiantan, Xuhui Riverside, and Post-Expo attracted more occupiers due to competitive rents and larger floorplates.

Investment Market

• Transaction Activity: In Q2, there were eight transactions involving office and business park assets, with a total consideration of over RMB4 billion.
• Market Sentiment: Investors remained cautious, prioritizing assets with stable income streams and future repositioning potential.
• Buyer Profiles: Key buyers included owner-occupiers, industrial capital, local private buyers, and selected long-term capital.
• Investment Focus: In H2, activity is expected to be concentrated in core-located assets, lower-ticket opportunities, strata-saleable assets, and properties with clear industrial-use attributes.

Key Submarkets and Transactions

• Core Submarkets: Little Lujiazui, Nanjing West Road, and Huaihai Middle Road maintained high rents and tenant retention.
• Notable Transactions:
  • Lumina Shanghai Phase One (Xuhui Riverside): Luxshare Precision Industry signed a new lease of 4,400 sqm.
  • HKRI Taikoo Hui (Nanjing West Road): Eli Lilly renewed and expanded its space by 2,200 sqm.
  • Raffles City the Bund (North Bund): UBI Quant renewed and expanded its space by 2,300 sqm.
  • DBS Tower (Little Lujiazui): Tullett Prebon SITICO renewed its space of 5,200 sqm.
  • Lumina Shanghai Phase Two (Xuhui Riverside): Tencent expanded its space by 15,000 sqm.
  • West Link Centre Block A (Minhang): MeiG Smart Technology acquired the property from Silk Road Fund via an equity transaction.
  • Blockchain Valley and Yunhui Digital Intelligence Centre 15-17F (Jing’an): Shanghai Kaicheng Holdings acquired the asset from Shanghai Shibei via an asset transaction.

Key Information

• Supply Dynamics: The slowdown in new supply allowed the market to absorb previously accumulated vacancy.
• Occupier Strategy: Companies are using the rental adjustment window to upgrade, expand, and consolidate their office portfolios.
• Sector Contributions: TMT, finance, biopharmaceutical, retail, and professional services were the main sectors driving leasing activity.
• Location Preferences: Core CBDs like Little Lujiazui and Nanjing West Road remain highly valued for corporate profile and accessibility, while emerging submarkets are gaining interest for cost efficiency and flexibility.
• Investor Behavior: Value-led buyers and owner-occupiers were the primary drivers of investment activity, focusing on stability, repositioning, and operational enhancement.

Outlook

• Short-Term: Rents are expected to continue a mild downward trend, but core submarkets may stabilize earlier due to their high-quality assets and established tenant bases.
• Long-Term: A broad-based recovery will depend on improved macroeconomic expectations and stronger corporate expansion appetite.
• H2 2026: Leasing demand is anticipated to be driven by upgrade-led relocations, cost optimization, efficiency gains, and portfolio consolidation.
• Investment Focus: Investors will likely remain selective, targeting core assets, lower-ticket opportunities, and properties with industrial-use attributes.

Contact Information

• Regina Yang: Director, Head of Research & Consultancy, Shanghai & Beijing
  Email: regina.yang@cn.knightfrank.com
  Phone: +86 21 6032 1728

• Mars Yin: Senior Manager, Research & Consultancy
  Email: mars.yin@cn.knightfrank.com
  Phone: +86 21 6032 1730

• Virginia Huang: Managing Director, North and East China
  Email: virginia.huang@cn.knightfrank.com
  Phone: +86 21 6032 1719

Disclaimer

• This document contains general information only and is subject to change without notice.
• All images are for illustration purposes only.
• No representations or warranties are given, intended, or implied.
• Knight Frank will not be liable for any losses or damages arising from the use of this information.
• The material is confidential and should not be disclosed to anyone other than employees who need to evaluate it.