Leasing momentum remains weak despite large deals from emerging technology sectors

• Leasing activity remained cautious among most office tenants, leading to overall net absorption falling below 20,000 sqm. However, emerging submarkets continued to benefit from leasing demand driven by fast-growing industries.
• Entities related to robots, low-altitude aircraft, and AI emerged collectively leased over 15,000 sqm in Pazhou. Meanwhile, one newly completed project in GZIFT committed a gaming company as anchor tenant, marking one of the largest transactions in 2025.

The market ends 2025 with a stable overall vacancy rate

• There were no new project completions in Q4 2025. The overall vacancy rate remained largely unchanged from the previous quarter at 22.9%.
• GZIFT and Pazhou continued to attract tenants relocating from ZJNT, supported by their competitive pricing in the new facilities, leading to a decline in vacancy rates in these two submarkets.

Both rental and capital markets trend downward

• Rents continued their downward trajectory. Facing pressure to reduce vacancies by year-end, some landlords adopted a “price-for-volume” strategy, while others sought to enhance project competitiveness through hardware upgrades.
• The capital market remained relatively quiet, amid softening investment sentiment. Investors demanded higher risk premiums, driving further decompression of market yields.

Outlook: Near-term oversupply is set to weigh on office market, despite potential new demand from emerging industries

• The gaming industry and sectors linked to global expansion are poised to drive new demand in the leasing market. Those fast-growing TMT companies from business parks increasingly seek to upgrade to Grade A office space.
• However, supply-side pressure will persist. New office supply in 2026 is projected to reach a record high of over 800,000 sqm, likely pushing the citywide vacancy rate higher.