Shifting consumer preferences fuel the expansion of emerging brands

• In Q4 2025, driven by emerging consumer trends, leasing demand for outdoor sports, consumer electronics, and art toy brands remained active. Leading brands enhanced customer experience by launching flagship stores and upgrading existing stores.
• Meanwhile, the growing diversity of consumer preferences hampered the expansion of certain traditional brands. In contrast, trendy new F&B and apparel brands are emerging rapidly, such as specialty bistro restaurants and Chinese streetwear brands.

Citywide vacancy rate slightly decreases

• A new retail project operated by China Resource Land on a light-asset mode launched in Shenzhen’s suburbs, featuring numerous regional debut stores. The mall drew strong foot traffic from nearby communities and achieved a high occupancy rate.
• In Q4 2025, most tenant-mix adjustments in shopping malls had limited impact on vacancy rates, while projects with high vacancy accelerated space absorption by committing supermarkets and entertainment tenants. Overall, the citywide vacancy edged down by 0.2 ppts q-o-q.

Rental performance shows further divergence across projects

• Shenzhen’s high retail supply in 2025 intensified leasing market competition. Benchmark retail projects, backed by prime locations and strong foot traffic, continued to attract premium brands and consequently support stable rental income.
• Facing a constrained tenant pool, many non-core projects addressed vacancy by leasing to entertainment operators, even while acknowledging the typically lower rent affordability of this sector. Citywide rental decline slightly widened to 2.7% q-o-q.

Outlook: Diversified stimulus measures are expected to power consumption recovery

• In addition to sustaining and enhancing stimulus measures such as trade-in programs and consumer subsidies in 2026, Shenzhen is expected to leverage concerts and sports events to drive consumption, thereby boosting leasing demand in sectors such as F&B and sport goods.
• Over the next 12 months, Shenzhen’s retail market will see around 250 thousand sqm of new supply. Although new supply is expected to moderate compared to 2025, citywide vacancy and rent levels may face near-term pressure as consumer spending has yet to fully recover.