Tenants prioritized cost efficiency, though prime locations maintained appeal

• Overall demand remained stable over Q3 2025, with most tenant activities driven by cost-saving purpose. Net absorption totalled 119,200 sqm as one of the newly completed attracted tenant activities due to its close proximity to consumer.
• ‌The quarter’s leasing activity was predominantly driven by 3PLs, manufacturers, and supermarket chains, with notable transactions including a major automaker securing 20,000 sqm in Jinshan and a supermarket chain anchoring a newly revitalized project.

Shanghai saw three new projects in Q3 2025

• Shanghai continued to see new supply delivery during the quarter – three projects totalling 327,000 sqm completed, bringing the year-to-date completion to 963,000 sqm. Vacancy as a result, further increased to 29.8% by the end of Q3 2025.
• Qingpu, Lingang and Northwest all recorded the completion of a new project. The Northwest project reached circa 90% occupancy thanks to its prime location, while Qingpu and Lingang faced slower leasing amid rising competition.

Downward trend in rents persists

• Overall rents decreased by 5.8% q-o-q on a like-for-like basis to RMB 1.20 per sqm per day.
• Amid cost-driven demand dominance and elevated vacancy rates, landlords maintain a relatively aggressive pricing strategy and rental rates continue to face downward pressure.

Outlook: Supply waves will gradually fade from 2026 onwards

• While the short-term supply surge will ease from 2026, high vacancy rates will continue exerting downward pressure on rents. The downward trend will persist, though at a slower pace.
• We anticipate sustained policy-driven consumption growth in Shanghai, which should help near-term logistics demand. Meanwhile, declining rents may incentivize tenants from surrounding cities to relocate to Shanghai for better delivery efficiency.