According to the China Index Academy, data from the China Real Estate Index System's office rent index survey of major business districts in key cities shows that in the second quarter of 2026, the average rent for office space in these districts was 4.49 yuan per square meter per day. This represents a quarter-on-quarter decrease of 0.48%, and a cumulative decline of 1.01% for the first half of the year.
Looking at the performance of individual business districts, 66 of them saw a quarter-on-quarter decline in office rents in the second quarter, accounting for 82.5% of the total. In contrast, 12 districts recorded a rent increase, making up 15%, and 2 districts saw rents remain flat, representing 2.5%. On the macroeconomic front, China's GDP for the first half of 2026 reached 69.6 trillion yuan, a year-on-year increase of 4.7%, although economic growth momentum weakened in the second quarter. In terms of consumption, total retail sales of consumer goods nationwide grew by 1.3% year-on-year in the first half of 2026, a slowdown of 1.1 percentage points from the first quarter. For investment, national fixed asset investment (excluding rural households) fell by 5.7% year-on-year in the first half of 2026, turning negative in cumulative terms from April, with real estate development investment dropping by 18%, dragging down overall investment. Exports remained relatively resilient, with total export value (in RMB terms) growing by 13.4% year-on-year in the first half, accelerating by 1.5 percentage points from the first quarter. The development of new productive forces is driving the service sector to maintain relatively fast growth, but the expansion drive of most enterprises remains insufficient. In the first half of 2026, the added value of the service sector grew by 5.2% year-on-year, 0.5 percentage points higher than GDP growth. The boom in new productive forces like artificial intelligence drove the information transmission, software, and IT services industries, as well as the leasing and business services industries, to see their added value increase by 10.7% and 11.9% year-on-year, respectively. However, the expansion drive of most service sector enterprises remains weak, with the average business activity index for the service sector in the first half being only 50.0%. Overall, in the first half of 2026, the Chinese economy maintained stable operation, supported by sustained macro-policy efforts and the resilience of external demand, with the leading role of new drivers continuing to strengthen. However, the external environment is becoming increasingly uncertain, domestic demand recovery is slow, the foundation for economic recovery and improvement needs to be continuously consolidated, and some enterprises still face significant operational pressures. The office market continues to exhibit a pattern of overall pressure with localized improvements. Rents stabilized in a few business districts concentrated with technology companies and in core city business districts, but the supply-demand imbalance in most districts remains severe, with vacancy rates under pressure and rents declining.
Rent Performance: In the second quarter of 2026, office rents in key cities fell by 0.48% quarter-on-quarter, with a cumulative decline of 1.01% in the first half.
In the first half of 2026, the demand for office space in key cities continued to show divergent trends. The development of technology industries, exemplified by artificial intelligence, drove the release of leasing demand from related companies. However, demand from traditional industries was weak, with corporate leasing decisions primarily focused on relocation or renewal. In terms of rents, most landlords continued to stabilize occupancy rates through flexible leases and rent concessions, leading to a continued downward trend in office rents in key cities. According to survey data from the office rent index of major business districts in key cities, the average rent for offices in the second quarter of 2026 was 4.49 yuan per square meter per day, a quarter-on-quarter decrease of 0.48% and a cumulative decline of 1.01% in the first half of the year.
Business District Performance: Over 80% of monitored business districts saw a quarter-on-quarter decline in rents, with relatively larger drops in districts like Haikou Guoxing and Chongqing Jiangbeizui.
In the second quarter of 2026, among the sample districts in first-tier cities, 83.3% saw a quarter-on-quarter decline in office rents, 13.9% saw an increase, and 2.8% saw rents remain flat. Among the sample districts in second-tier cities, 81.8% saw a quarter-on-quarter decline, 15.9% saw an increase, and 2.3% saw rents remain flat. In the second quarter of 2026, 66 sample business districts experienced a quarter-on-quarter decline in office rents, accounting for 82.5%, an increase of 4 districts from the first quarter. Among them, 6 districts, including Haikou Guoxing and Chongqing Jiangbeizui, saw rent declines of over 2.0%. 12 districts, including Chengdu Renmin South Road, Hangzhou Shenhua, Wuhan Wuchang Central, and Chongqing Jiazhou Xinfangpai, saw declines between 1.0% and 2.0%. 20 districts, including Beijing Financial Street, Shanghai East Nanjing Road, Qingdao Haier Road, and Shanghai Lujiazui, saw declines between 0.5% and 1.0%. 20 districts, including Changsha Nanhu Road, Shenzhen Chegongmiao, Nanjing Olympic Sports Center, and Guangzhou Beijing Road, saw declines between 0.1% and 0.5%. 8 districts, including Shenzhen Futian Central District and Qingdao Laoshan District Government, saw rents stabilize, with declines within 0.1%. At the same time, a small number of business districts saw a quarter-on-quarter increase in office rents. Specifically, Hangzhou Wulin business district saw the largest increase, at 0.69%. Suzhou Huxi business district increased by 0.56%. 10 districts, including Shanghai People's Square, Shenzhen Nanshan Central District, Changsha Wuyi Square, and Shanghai Xujiahui, saw increases within 0.5%. Furthermore, rents in two districts, Guangzhou Tianhe North and Tianjin Youyi Road, remained flat quarter-on-quarter.
Rent Trends: Rents in a few business districts concentrated with technology companies are expected to stabilize first, but the overall market's supply-demand imbalance is unlikely to change, and rents in most districts are likely to continue declining.
At the start of the 15th Five-Year Plan period, the macroeconomy is focused on high-quality development, with an emphasis on building a modern industrial system and developing new productive forces. Emerging pillar industries such as integrated circuits, aerospace, biomedicine, low-altitude economy, new energy storage, and intelligent robots are developing well. The "Artificial Intelligence+" action is accelerating the commercial and large-scale application of AI in key industries and fields. Leasing demand from related companies for new spaces, expansions, and upgrades provides some support for the office market, but it is not yet sufficient to reverse the severe supply-demand imbalance. At the same time, the development of the AI industry could, in the short term, lead to some companies reducing their workforce through job substitution, causing a pullback in office leasing demand in certain areas. Looking ahead to the second half of the year, with new supply entering the market, competition in some office districts could intensify further. On the demand side, technology companies are expected to continue their expansion, thereby releasing more office leasing demand. However, the expansion willingness of most companies is likely to remain cautious, and they are expected to continue compressing office costs through relocations or lowering renewal prices. In terms of rents, high-quality buildings in core business districts where tech companies are concentrated are expected to see rents stabilize first. Rents in most other office districts are likely to continue their downward trend.
Key City Office Market Performance:
Demand Trends: Nearly half of the key cities saw an increase in office vacancy rates, with the TMT industry showing relatively higher leasing demand.
Vacancy Rates: Cities like Wuhan and Changsha face significant vacancy pressure, while cities like Guangzhou and Chengdu saw vacancy rates rise compared to the end of the previous year.
In the first half of 2026, the supply of new office space in key cities continued to be released while demand recovery was slow, increasing vacancy pressure in some cities. According to data from the China Index Academy, in the second quarter of 2026, first-tier cities had relatively low Grade A office vacancy rates, with Guangzhou having the lowest at 12.1%. Among second-tier representative cities, Hangzhou and Suzhou had Grade A office vacancy rates below 20%, indicating relatively balanced supply and demand. Cities like Qingdao, Changsha, and Wuhan had relatively high Grade A office vacancy rates, suggesting greater vacancy pressure. Looking at changes in vacancy rates, in the second quarter of 2026, cities such as Guangzhou, Suzhou, Chengdu, Tianjin, Changsha, and Wuhan all saw their Grade A office vacancy rates increase compared to the end of the previous year.
Leasing Cases: TMT industry demand was relatively higher, and the proportion of leasing cases over 5,000 square meters increased.
In the first half of 2026, the China Index Academy monitored a total of 123 large-scale office leasing transactions. The TMT industry, financial sector, and business services continued to drive the most demand, accounting for nearly 70% of all cases. Specifically, the TMT industry recorded 41 cases, accounting for 33%, an increase of 15 percentage points year-on-year. The financial and business services sectors recorded 30 and 13 cases, accounting for 24% and 11%, respectively. Companies from other industries each recorded fewer than 10 cases, accounting for about 32% of the total. By size, in the first half of 2026, there were 32 monitored cases with leasing areas exceeding 5,000 square meters, accounting for 26%, an increase of 12.1 percentage points year-on-year. The tenants in these large-scale cases were primarily from the financial and TMT industries.
Major Transactions: Market activity improved compared to the same period last year, with institutional investors continuing to focus on commercial office assets in core cities.
In the first half of 2026, the activity level in China's major transaction market improved compared to the same period last year. The China Index Academy monitored a total of 117 major transactions, an increase of 16 from the same period last year. Among these, 57 transactions involved first-tier cities, with Shanghai being the most concentrated, accounting for 28 deals. Shenzhen and Beijing each had over 10 deals, while Guangzhou had only 4 deals. There were 33 transactions involving second-tier cities, with Chongqing having the highest number at 4. Seven cities, including Suzhou, Hefei, and Wuhan, had 2 to 3 transactions each. Nine cities, including Urumqi, Kunming, and Shijiazhuang, had 1 transaction each. There were 28 transactions involving third- and fourth-tier cities, spread across more than 20 cities including Zhuhai, Jinhua, and Jiaxing. In the first half of 2026, based on disclosed transaction amounts, the China Index Academy monitored a total of 59.9 billion yuan in major transactions. First-tier cities accounted for approximately 46 billion yuan, with Shanghai exceeding 27 billion yuan, Beijing and Shenzhen recording 12 billion yuan and 5.6 billion yuan, respectively, and Guangzhou about 800 million yuan. Second-tier cities accounted for approximately 8 billion yuan, with Hefei exceeding 1 billion yuan. Cities like Wuhan, Qingdao, Chongqing, Tianjin, Hangzhou, and Xi'an had transaction amounts between 500 million and 1 billion yuan. Third- and fourth-tier cities accounted for 5.4 billion yuan, with Zhuhai recording the highest amount at 950 million yuan. By property type, high-quality retail commercial and office properties accounted for over 70% of the transaction value. In terms of transaction count, in the first half of 2026, there were 55 deals involving retail commercial properties, office buildings, and mixed-use complexes, accounting for nearly half of the total. For transactions with disclosed amounts, office buildings had the highest transaction value at 30.1 billion yuan, accounting for 50%. Mixed-use complexes and retail commercial properties had transaction values of 8.2 billion yuan and 5.5 billion yuan, respectively, together accounting for 23%. Hotel and industrial assets recorded transaction values of 7.6 billion yuan and 6.9 billion yuan, each accounting for about 12%. Other asset types accounted for approximately 1.6 billion yuan, or 3% of the total. From the buyer's perspective, institutional investors and real estate-related companies accounted for a significant portion of the transaction value. In the first half of 2026, based on disclosed buyers, local state-owned enterprises, institutional investors, technology companies, and manufacturing companies were relatively active in mergers and acquisitions, accounting for nearly 60% of the total transactions. For all transactions, buyers who were institutional investors accounted for about 30% of the transaction value. From the seller's perspective, real estate companies remained the primary sellers in the major transaction market. Based on disclosed sellers, domestic and foreign real estate-related companies accounted for nearly 60% of the transaction count. For all transactions, their share of the transaction value was over 60%. Looking ahead to the second half of the year, there is still room for asset price negotiation, and institutional investors and corporate end-users are expected to remain active. As asset exit channels become increasingly diversified, institutional investors are likely to continue focusing on high-quality assets in core locations of high-tier cities with stable rental yields, as well as older properties and non-performing assets that align with urban renewal directions and have potential for renovation. For corporate end-users, the development of industries like AI and advanced manufacturing will generate more demand for office space. The demand for enterprises to purchase their own office buildings will remain a key pillar of the major transaction market.