SZ's Grade A office market witnesses rebound in 2024: Savills

Three Savills' experts on real estate market answer questions at a media conference. Courtesy of Savills

The commercial real estate market in Shenzhen has experienced a notable rebound in 2024, with the net absorption of Grade A office buildings increasing significantly.

According to data released by real estate consultancy firm Savills on Wednesday, the total stock of Grade A office buildings in Shenzhen reached 11.376 million square meters by the end of 2024, up 4.2% year on year.

Supported by favorable industrial policies and cost-driven relocation and upgrading demand, the annual new demand for Grade A office buildings has overall recovered. The net absorption has rebounded quarter by quarter, with the annual net absorption reaching 312,000 square meters, an increase of 42.8% year on year, the data showed.

In the fourth quarter of this year, the market saw several notable transactions from industries such as artificial intelligence (AI), hardware equipment, and retail. The net absorption volume in a single quarter increased by 6.9% month on month to 100,000 square meters. Due to the support of these positive factors and no new supply during the quarter, the vacancy rate of the city's Grade A office building market decreased by 0.9 percentage points month on month to 29%.

Looking ahead, Savills predicts that the new supply of Grade A office buildings in Shenzhen will reach 961,000 square meters in 2025. Three new projects are expected to be delivered to the market in the first quarter of next year, adding 241,000 square meters of supply area.

The Shenzhen Hi-Tech Industrial Park in Nanshan District is one of the key areas for office building supply in Shenzhen. Liu Yunhan, a senior analyst of the capital marketing department of Savills South China, said, "Shenzhen Hi-Tech Industrial Park has become a world-leading science and technology innovation center, particularly in high-end manufacturing, AI, 5G communication, and biomedicine. It has attracted a large number of domestic and foreign enterprises."

Ray Wu, managing director of Savills Shenzhen, commented, "Compared with other core business districts, the hi-tech park offers higher cost-performance and significant long-term investment return potential, making it an attractive choice for investors."