Leasing activities across various sectors remained solid throughout 2025

• Evolving consumer preferences and stimulus policies created opportunities for specific sectors. In 2025, new leases were predominantly driven by industries such as consumer electronics and home appliances, sportswear, collectible toys, pets, and affordable dining.
• Retail leasing activities remained steady in Q4 2025, supported by solid pre-leasing deals in new projects and incentive for tenants in existing ones. Net take-up in Shanghai’s urban area reached 273,000 sqm in Q4 2025, bringing the full-year total to 404,200 sqm.

Three new projects reached completion in Q4 2025

• In Q4 2025, two prime projects and one decentralised project collectively contributed 265,000 sqm of GFA to Shanghai’s retail market. For the full year of 2025, two prime projects and three decentralised projects delivered a total of 476,500 sqm of retail GFA.
• Rental concessions and more flexible lease terms aided landlords in backfilling vacancies. Prime vacancy rate delinced by 0.4 ppts to 8.4% in Q4 2025, while decentralised vacancy rate declined by 0.2 ppts q-o-q to 13.3%.

Rental decline continues throughout 2025

• Intense competition continued to weigh on most landlords, leading to a decline in average rents. In Q4, average ground floor rents in prime area dropped 0.4% q-o-q to RMB 41.8 per sqm per day. Decentralised area decreased 1.3% q-o-q to RMB 14.4 per sqm per day.
• In the tenant-favourable market of 2025, average prime rents declined by 4.3% y-o-y, and decentralised rents fell 6.4% y-o-y, both decelerated compared to 2024. 

Outlook: Stimulus policies to remain effective

• We expect stimulus policies and shifting consumer trends to continue to bolster leasing activities in key retail sectors including sportswear, collectible toys, consumer electronics, and services, which will drive sustained store expansion.
• However, with persistent deflationary pressures and intensifying competition, market rent is likely to continue its downward trend. That said, we expect leading regional malls and well-operated malls in prime areas to outperform.