Demand stabilized, and market confidence is ready to resume
Insights & recommendations
Since 2022, the downward pressure on China's economy was intensified by the impact of Covid. Some occupiers postponed their expansion plans or even downsized, resulting in a decline in leasing demand, as evidenced by a 50% YOY decrease of Shanghai BP’s net absorption, which set a record low since the last eight years. In the short term, the optimized Covid response should boost the market confidence. In a long run, Shanghai is vigorously promoting tech industries, underpinning a strong demand for BPs. As a result, we advise the landlords to actively adopt a tenant rebalancing, focusing on industries with excellent long term growth potential. We also advise investors to be more aggressive and grasp the window to buy low. In core submarkets such as Caohejing , Zhangjiang and Jinqiao , and emerging submarkets like Zhoukang , both high profile projects and value added assets are very competitive.
