Full Breakdown
Declining Demand Amidst Peak Office Supply in Greater China
4/1/2026, 11:32:10 PM
Overview of the Current Situation
According to a report by Cushman & Wakefield, the supply of prime office space in mainland China and Hong Kong is projected to peak in 2025, while demand is hindered by an economic slowdown and global uncertainties. The total premium office inventory across 21 major cities in Greater China, which includes Hong Kong, Beijing, Shanghai, Shenzhen, Guangzhou, and Taiwan, is expected to reach 99.2 million square meters (1.07 billion square feet) by the end of 2025. This represents an increase of 4.6 million square meters, or 8.4%, from the previous year.
Demand and Vacancy Rates
Despite the increase in supply, demand for office space has not kept pace. The total net absorption of office space has only risen by 2.3 million square meters, resulting in an overall vacancy rate increase of 1 percentage point to 25.4% across the region. Major cities such as Hong Kong, Shanghai, and Shenzhen have seen significant activity from multinational firms, which accounted for a substantial portion of leasing deals in 2025.
Rental Trends in Gateway Markets
The report indicates that prime office rents in key markets have experienced a decline, with reductions ranging from 3.9% to 16%. Beijing has reported the most significant drop in rental prices. The anticipated new grade A office supply is estimated to be around 8.5 million square meters in 2025, with projections suggesting a decrease to 7.3 million square meters in 2027 and further down to 4.9 million square meters in 2028.
Criticism & Opposition
Some industry analysts have raised concerns regarding the sustainability of such high vacancy rates and declining rents. Critics argue that the economic conditions and uncertainties may lead to a prolonged period of stagnation in the office market, potentially impacting investment decisions and future developments.
Official Statements & Responses
Cushman & Wakefield's report highlights the disconnect between supply and demand, emphasizing the need for stakeholders to reassess their strategies in light of the changing market dynamics. The consultancy noted that while there is a significant influx of new office space, the economic environment poses challenges that could affect future leasing activity.
What's Next
As the office market navigates these challenges, stakeholders will be closely monitoring economic indicators and trends in multinational firm activities to gauge future demand. The upcoming years will be critical in determining how the market adapts to the evolving landscape of office space utilization in Greater China.
