Slowing demand while rents remain stable
Insights & recommendations
In Q2 2022, Shanghai’s office market was affected by an outbreak of Covid, leading to overall sluggish demand. In late March, the Covid outbreak in Shanghai had a tremendous impact on the city's economic and social development. Demand was negatively affected, significantly slowing transaction activity. As work and production resumes, we expect the office market will gradually return to the active demand seen in Q1. Therefore, Colliers recommends that:
•Landlords should actively face the phased impact of the lockdown on the Shanghai office market, and each office building can develop a distinctive leasing strategy based on its own product and operational characteristics.
•The exact impact of Shanghai’s recent lockdown is yet to be seen. However, we recommend tenants take this opportunity to review their real estate footprints and business strategies to lock in longer-term leases in preferred buildings while negotiating favorable rental packages.
