China Office Real Estate Market Size
| Study Period | 2019 - 2029 |
| Base Year For Estimation | 2023 |
| Forecast Data Period | 2024 - 2029 |
| Historical Data Period | 2019 - 2022 |
| CAGR | 5.50 % |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
China Office Real Estate Market Analysis
During the period from 2023 to 2028, the China office real estate market is expected to register a CAGR of more than 5.5%.
- Due to restrictions, social distancing policies, and a work-from-home culture, COVID-19 had a significant impact on China's office real estate market. The COVID-19 pandemic in China resulted in significant changes in workplace working habits and locations. As a result of the pandemic, the majority of businesses implemented remote working.
- The volume of commercial real estate investments on the Chinese mainland reached USD 7.3 billion in the third quarter of 2021, and the full-year amount is expected to surpass that of 2020. Office investments took the lion's share, or 57.6 percent, of the volume of commercial real estate investments in the third quarter, up 14.2 percent quarter-on-quarter. In 2021, eight of the world's top 20 most expensive office spaces will be in China. These include Beijing Financial Street, Beijing's Central Business District, and Shanghai's Pudong New Area.
- With the recovery of Beijing's commercial real estate investment market continuing through year-end, the 2021 total sales volume exceeded 60 billion yuan (USD 8.92 billion), with nearly 60 transactions recorded. The figure was the second highest in the previous five years, up 35% from 2020. Office properties remained hot in 2021, accounting for 56 percent of the total transaction volume. In the first half of 2021, SK Tower sold for CNY 9.06 billion (USD 1.35 billion), making it the highest-priced single-asset deal to close since 2019. The total transaction volume for retail properties rose 34 percent year-on-year, with Brookfield's acquisition of Yuehui Vanke Plaza drawing great interest in the market.
China Office Real Estate Market Trends
Robust Leasing Demand For the Office Spaces Driving the Market
In Q2 2021, robust leasing demand pushed up nationwide net absorption to 2.09 million sq. m., slightly below the record quarterly high. Tier 1 cities account for over 50% of overall net absorption, while other tech-driven Tier 2 cities, such as Chengdu and Hangzhou, registered 100,000 sq. m. to 200,000 sq. m. of demand. The overall vacancy rate has been pushed down 0.6 percentage points to 22.2% by robust demand, and nationwide office rents fell by 0.2% year over year.
In the last year of 2021, Beijing's office market set a new high as demand soared following the disruption caused by the COVID-19 outbreak, which could raise future expectations. The net absorption of the capital's Grade A office space reached about 1.02 million square meters in 2021, 5.7 times higher than that of 2020. It marked the second time the data exceeded 1 million after 2010. The demand came mainly from information technology and finance companies, which contributed 41.7 percent and 21.9 percent of the total transaction area.
Tencent, Byte-Dance, Alibaba, Huawei, Meituan, and Amazon, among others, contributed to several new bulk lease transactions last year, with rental areas exceeding 5,000 square meters. As a result of growing demand from top internet companies, four of the A-grade office markets in the city Financial Street, Zhongguancun, Wangjing, and the area of Ya'ao recorded a vacancy rate lower than 10 percent.
Demand for Co-Working Spaces Driving the Market
Over time, the number of co-working office spaces has increased dramatically. In addition, Beijing and Guangzhou are expected to be the leading cities in this industry, with a high number of co-working spaces. Meanwhile, Beijing remained a key commercial hub in the country, with most companies opting for coworking and shared office spaces. The second-largest coworking market in China is Wuhan, which has shared offices that attract a diverse spectrum of tenants, including major corporations, government agencies, and startups.
The majority of freelancers, entrepreneurs, and small and medium-sized businesses (SMEs) are using co-working spaces. Because they offer excellent features and amenities like high-speed internet, 24-hour access to office space and meeting rooms, furnished and unfurnished offices, and so on. Furthermore, serviced offices (which comprise both creative and traditional offices) account for the majority of the co-working office space.
Despite the fact that China's SME sector is growing at a slow pace, the rising cost of business operations, which includes high commercial property rental costs, has prompted many aspiring small firms to seek for more cost-effective options. As a result, China is presently experiencing a major growth in the co-working culture, with co-working spaces popping up all over the country.
China Office Real Estate Industry Overview
The China office real estate market is highly competitive, as the sector's domestic and foreign participants have created a competitive environment. Moreover, China's office real estate is becoming a preferred destination for global institutional investors, driven by robust office space take-up, declining vacancy levels, and rising rentals.
Some of the office real estate developers in the country include Wanda Group, Country Garden Holdings, China Vanke Co., Sunac China Holdings, and Poly Real Estate. It has been observed that many new players are entering the market as it is one of the most demanded these days.
China Office Real Estate Market Leaders
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Wanda Group
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Country Garden Holdings
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China Vanke Co.
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Sunac China Holdings
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Poly Real Estate
*Disclaimer: Major Players sorted in no particular order
China Office Real Estate Market News
- April 2023: China's new private equity real estate pilot programme is designed to boost investment in the property sector and attract increased foreign investment. The pilot programme, announced by the Securities Regulatory Commission (CSRC) last month, is intended to boost private investment in the Chinese real estate market and open the door to foreign investors. The aim is to improve liquidity and reduce property developers' debt ratios.
- March 2023: Cushman & Wakefield's (NYSE: CWK) Greater China Capital Markets team recently facilitated the acquisition by CapitaLand Investment Private Fund of the Beijing Suning Life Plaza mixed-use development from Suning for approximately US$400 million.
China Office Real Estate Market Report - Table of Contents
1. Introduction
- 1.1 Study Assumptions
- 1.2 Scope of the Study
2. Research Methodology
3. Executive Summary
4. Market Insights
- 4.1 Market Overview
- 4.2 Technological Trends in the Industry
- 4.3 Government Initiatives and Regulatory Aspects
- 4.4 Industry Value Chain Analysis
- 4.5 Insights on Rental Yields in the Office Real Estate Segment
- 4.6 Insights on the Key Office Real Estate Industry Metrics (Supply, Rentals, Prices, Occupancy (%) / Vacancy (%))
- 4.7 Insights on Office Real Estate Construction Costs
- 4.8 Impact of COVID-19 on the Market
5. Market Dynamics
- 5.1 Drivers
- 5.2 Restraints
- 5.3 Opportunities
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5.4 Porter's Five Forces Analysis
- 5.4.1 Bargaining Power of Suppliers
- 5.4.2 Bargaining Power of Consumers/Buyers
- 5.4.3 Threat of New Entrants
- 5.4.4 Threat of Substitute Products
- 5.4.5 Intensity of Competitive Rivalry
6. Market Segmentation
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6.1 By Major Cities
- 6.1.1 Beijing
- 6.1.2 Shanghai
- 6.1.3 Rest of China
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6.2 By Sector
- 6.2.1 Information Technology (IT and ITES)
- 6.2.2 Manufacturing
- 6.2.3 BFSI (Banking, Financial Services, and Insurance)
- 6.2.4 Consulting
- 6.2.5 Other Services
7. Competitive Landscape
- 7.1 Market Concentration Overview
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7.2 Company Profiles
- 7.2.1 Wanda Group
- 7.2.2 Country Garden Holdings
- 7.2.3 China Vanke Co.
- 7.2.4 Sunac China Holdings
- 7.2.5 Poly Real Estate
- 7.2.6 Evergrande Group
- 7.2.7 China Overseas Land & Investment Ltd.
- 7.2.8 Greenland Holding Group
- 7.2.9 China Resources Land Ltd.
- 7.2.10 China Merchants Shekou Industrial Zone Holdings
- 7.2.11 Gemdale Corporation
- 7.2.12 Henderson Land Development Company Limited*
- *List Not Exhaustive
8. Market Opportunities and Future Trends
9. Appendix
- 9.1 Insights on Capital Flows (Investments in the Office Real Estate Market)
- 9.2 Pricing Trend Analysis for New Office Building Construction in China
China Office Real Estate Industry Segmentation
Office real estate is the construction of buildings for leasing and selling purposes to companies from different sectors. This report aims to provide a detailed analysis of the Chinese office real estate market. It focuses on the office real estate sector's market insights, dynamics, technological trends, and government initiatives.
China's office real estate market is segmented by sector (Information Technology (IT and ITES), Manufacturing, BFSI (Banking, Financial Services, and Insurance), Consulting, and Other Services) and by major cities (Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, and the Rest of China). The report offers market size and forecasts in values (USD)for all the above segments.
| By Major Cities | Beijing |
| Shanghai | |
| Rest of China | |
| By Sector | Information Technology (IT and ITES) |
| Manufacturing | |
| BFSI (Banking, Financial Services, and Insurance) | |
| Consulting | |
| Other Services |
China Office Real Estate Market Research FAQs
What is the current China Office Real Estate Market size?
The China Office Real Estate Market is projected to register a CAGR of greater than 5.5% during the forecast period (2024-2029)
Who are the key players in China Office Real Estate Market?
Wanda Group, Country Garden Holdings, China Vanke Co., Sunac China Holdings and Poly Real Estate are the major companies operating in the China Office Real Estate Market.
What years does this China Office Real Estate Market cover?
The report covers the China Office Real Estate Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the China Office Real Estate Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Office Real Estate in China Industry Report
Statistics for the 2023 Office Real Estate in China market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Office Real Estate in China analysis includes a market forecast outlook to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
