China’s top-tier cities struggled with a worsening glut of premium office space in 2025, as new supply outpaced demand by more than double, reports Caixin.
The oversupply was most severe in the southern tech capital of Shenzhen, where the supply-demand ratio soared to 2.7 to 1—far higher than levels in other major markets. Muted demand has weighed on these cities’ leasing capacity for four consecutive years. Net absorption of Grade A office space across Beijing, Shanghai, Guangzhou and Shenzhen—a measure of the net change in occupied office space over a given period—peaked at 3.34 million square meters in 2021 but declined sharply to about 1.1 to 1.2 million square meters annually since 2022.
The enduring softness reflects broader headwinds in China’s commercial real estate market, where a slowing economy and previous construction booms have shifted landlords’ focus from returns to occupancy. Net absorption across the four cities totalled 1.18 million square meters in 2025, down 3.2% from the previous year and nearly 65% below the 2021 peak.