Tenants remained cautious and leveraged the tenant-favorable market to secure favorable terms

• Net absorption reached 52,600 sqm in the CBD and 107,800 sqm in the decentralised market in Q4 2025. For the entire year, net absorption recorded 499,300 sqm. Upgrade demand continued amid narrowing rental disparity between Grade A and Grade B projects.
• Demand from financial and professional services remained resilient, especially private funds and domestic law firms. Meanwhile, outdoor sports and art toy retailers saw expansionary demand driven by shifting consumer behavior, and the tech sector recorded large deals.

Four new projects totaling 315,000 sqm entered the market in Q4 2025

• 2025 recorded 1,036,500 sqm of new completion, pushing overall vacancy rate to 24.3%, up 0.2 ppts q-o-q and 1.1 ppts y-o-y. In CBD, two projects delivered 242,900 sqm in Q4 2025, pushing vacancy up 1.7 ppts q-o-q and 1.6 ppts y-o-y to 18.0%.
• In the decentralised market, two projects totaling 72,100 sqm reached completion in Q4 2025, adding to an annual total completion of 707,600 sqm. The influx further raised the decentralised vacancy rate by 0.6 ppts y-o-y to 29.6%.

As the overall market remained tenant-favorable, rents stayed in downward cycle

• In the CBD, rents decreased by 2.8% q-o-q and 12.1% y-o-y to RMB 6.4 per sqm per day. Most landlords remained flexible in negotiating lease terms. Some projects that successfully maintained high occupancy adopted stable strategies.
• In the decentralised market, rents decreased by 2.7% q-o-q and 11.0% y-o-y to RMB 4.2 per sqm per day. High vacancy rate continued to drive down landlords’ rental expectations and led them to offer substantial incentives.

Outlook: Overall market will continue to favor tenants in the short term

• Given the continuous supply influx, tenants will leverage market conditions to secure favorable leasing terms. Cost-driven relocation and upgrade demand will remain the primary drivers.
• Although rents of some highly occupied premium projects have stablised, tenants’ cautious strategies will still weigh on rental performance in the overall market.