CBRE

FIGURESICHINAIQ32025

increasinglysoughtafterbyinvestors

+5.2%

GDP

(Q1-Q32025,Y-0-Y)

+4.5%

Retailsales

(a1-Q32025o-y)

0.5%

FixedAssetInvestment(a1-Q32025o-y)

source:NationalMunicipalstatisticsBureau,CBREResearch,october2025

FIGURE1:Quickstatistics

Executivesummary

--o--0-

Rent2.8%8.1%10.2%

absorptionreached490,000sq.m,adropof19%q-0-q,indicatingmoderationofdemand.

Averagevacancyroseby0.5pps.q-0-qto24.3%bytheendofthequarter.Intensifiedtake-uplednationwideaveragefacerentstofallby2.8%q-0-q.

vacancyRate

+0.5pps.

+0.8pps.

+1.2pps.

Rent

0.6%

-1.8%

vacancyRate

+o.1pps.

+0.2pps.

+0.3pps.

Rent

3.7%

-10.1%

-13.9%

vacancyRate

0.6pps.

2.5pps.

-3.0pps.

Totalvolume

19.5%

+11.2%

14.2%

--0--0-

absorptionwas560,000sq.m.,down34%q-0-qand61%y-o-y.Tenantmixadjustmentsand

layoutreconfigurationsinshoppingmallspushedupvacancyby0.1pps.q-o-qto7.5%.Averagegroundfloorshoppingmallrentsfell0.6%q-o-q,markinganacceleratingdecline.

-

inQ32025,exceeding2millionsq.m.forthefourthconsecutivequarter.Domestice-coerceand3PLsaccountedfor63%ofnewleases.Newsupplyincreasedby26%q-o-qto1.77millionsq.m.whilevacancydeclined0.6pps.to18.8%.Nationwidelogisticsrentsfell3.7%q-0-q.

-

Note1:Transactionsincludedealsaboveus$10millionintheoffice,retail,mixed,industrial,hotelandothercommercialsectorssource:CBREResearch,Q32025.

markingdropsof19%q-0-qand14%y-0-yandindicatingcautiousmarketinvestmentsentiment.Datacentresattractedincreasingdemand.sourceofcapitalwerediverse,withInstitutional

investorsretainingtheirfocusontheconsumptionandlivingsectors.

Economy

china'SGDpincreasedby4.8%y-o-yand1.1%q-o-qinQ32025,withthey-o-ygrowthrate

deceleratingby0.4pps.comparedwiththepreviousquarter.GDpincreasedby5.2%y-o-yforthefirstthreequartersof2025andisexpectedtoachievethecentralgovernment'sgrowth

targetof5%forthefullyear.However,challengesarisingfromweakdomesticdemandandtherealestatemarketdownturnwillintensifyintheshortterm.

Retailsalesgrowthslowedonam-o-mbasis,logging3.7%,3.4%and3.0%forJuly,Augustandseptember,respectively,owingtolastyear'shigherbaseandtheweakeningofthe"trade-in"effect.Tradecategoriessuchashouseholdappliancesandfurnitureeligibleforgovernment

subsidiesledgrowthbuttherateofexpansiondeclined.salesgrowthforgold,silver,jewelleryandcosmeticsacceleratedcomparedwithQ22025.

Thecumulativegrowthrateoffixedassetinvestmentdecreasedby0.5%y-o-yoverthefirstthreequartersof2025,thefirstperiodofnegativegrowthsinceAugust2020.Thedeclineininvestmentinrealestatedevelopmentacceleratedto-13.9%whilethegrowthratesof

manufacturinginvestment(4.0%)andinfrastructureinvestment(3.3%)alsoslowed.The

slowdowninfixedinvestmentinthemanufacturingindustryissomewhatduetotheinitial

effectofanti-involutionpolicies;agovernment-ledstrategytocombatexcessiveandself-

defeatingcompetition.Thecapacityutilisationrateofindustrialenterprisesincreasedby0.6pps.q-o-qto74.6%whiletheirprofitgrowthrateforthefirsteightmonthsturnedpositive.

FIGURE2:chinaGDPGrowth(%,Y-0-Y)

source:NationalstatisticsBureau,Q32025.

Thankstotheoptimisationofexportstructureanddiversifiedmarketdevelopment,exports

remainedresilientinQ32025,risingtoasix-monthhighinseptember.Duringthemonth,exportstotheEuandASEANincreasedby14.2%and15.6%,respectively,whileexportstotheBelt&Roadeconomies,whichaccountedformorethanhalfofthetotalexportvalue,increasedby17.2%y-o-y.

salesofcommercialhousingdecreasedby7.9%y-o-yforthefirstthreequarters,2.4pps.higherthanthatforH12025butsignificantlybelowthe22.7%declineobservedinthesameperiodlastyear.DrivenbyAugust'slooseningofpurchaserestrictionsinBeijing,shanghaiandshenzhen,transactionvolumeofnewhousesintierIcitiesreached1.6millionsq.m.inseptember,up16%fromthepreviousmonthandanincreaseof1%y-0-y.

FIGURE3:ReserveRequirementRatio(RRR)and1yearLoanprimeRate(LPR)

---RRR(Largefinancialinstitutions,LHS)1-yearLPR(RHS)5-yearLPR(RHS)

source:PBOC,CBREResearch,Q32025.

Rent

-10.2%y-o-y

NetAbsorption+12%y-o-y

ofce

vacancy

+1.2pps.y-o-y

Demandmomentumslowsq-o-q;rentaldeclinesettopersist

Nationwidenewofficesupplyreached1.32millionsq.m.inQ32025,up17%q-o-qand37%y-0-y.DespitetheadditionofchengduFinancialcity,newstockwasprimarilyconcentratedinnon-co「esubmarkets,includingshenzhenQianhaiandHouhai,GuangzhouInternationalFinancialcity,

wuhanHangkongRoad,TianjinHaiheRiverside,andshanghaiNewBund.

Nationwidenetabsorptionrecorded490,000sq.m.inQ32025,adropof19%q-o-q,indicatingamoderationindemand.cumulativenetabsorptionforthefirstthreequartersin2025reached1.66millionsq.m.,a31%increasey-o-y,suggestingdemandgenerallyremainsonabottoming-out

recoverytrack.EightofthetencitiestrackedbycBRErecordedy-o-ygrowthincumulativenet

absorptionforthefirstthreequarters.Tianjinandsuzhouweretheonlycitiestoregisterdeclines.

Risingcompletionspushedupnationwideaverageofficevacancyby0.5pps.q-o-qto24.3%bytheendofthequarter.Thankstosustainedtechsectorexpansionandmoderatingsupply,Beijing's

officevacancyratefellbelow20%forthefirsttimesince2023.However,amidintensifiedtake-up,nationwideaveragefacerentsdeclinedby2.8%q-0-q.continuedlandlordconcessions,particularlyregardingrent-freeperiods,ledtoanevensteeper4.2%q-o-qdropineffectiverents.Thisbroughtthecumulativedeclineforthefirstthreequartersoftheyeartoover10%.

Relocationsandrenewalsdominateleasingactivity;demandfromB2Btechcompaniesandnon-bankingfinancialinstitutionsremainssolid

officegrossleasingvolume(includingnewleasesandrenewals)grew4%q-o-qand14%y-o-yinQ32025.Incrementaldemandremainedsubdued,however,withrelocationsandrenewals

accountingfornearly80%ofleasingactivity.Renewalsalonecontributedover30%oftransactedareaforthesecondconsecutivequarter.

FIGURE4:chinaofficeNewsupply,NetAbsorptionandvacancyRate

FIGURE5:vacancyRateandDevelopmentpipeline

source:CBREResearch,Q32025.

TMT(23%)andFinance(21%)remainedthetoptwodemanddriversofnewleases.TheTMT

sectormaintaineditsleadingpositionforthesixthconsecutivequarter,withtheAIsubsectorreportinganincreaseinnewleasingvolumeof67%q-o-qand191%y-o-y.Activityfromthis

sectorwasmainlyfocusedinsubmarketsincludingshanghaiwujiaochangandxuhuiRiverside,Beijingzhongguancun,andshenzhenQianhai.

Demandfromthefinancesectorprimarilystemmedfromrelocationandconsolidationbynonbankingfinancialinstitutions.Newleasingvolumefromsecuritiesandfundinstitutionsgrew10%y-o-yinQ32025.ActivesubmarketsincludedBeijingchaoyangcBDandFinancialstreet,shanghaiHuamuandLujiazui,shenzhenHouhai,andchengduFinancialcity.

FIGURE6:proportionofLeasedofficespacebyIndustry2

consumerserviceandEducationpharmaceuticalandLifescienceRealEstateandArchitecture

25%

Note2:officeleasingtransactionsincludenewsetup,expansion,relocationandupgrading.source:CBREResearch,Q32025.

FIGURE7:chinaofficeRentalIndex3

source:CBREResearch,Q32025.

Rent

NetAbsorption-61%y-o-y

vacancy

Retail

+0.3ppsy-o-y

consumersentimentdisplaysmarginalweakness;malladjustmentsandtenantmixrefinementscontinue,placingdownwardpressureonrents

Nationalretailsalesgrew3%y-o-yinseptember,withrateofgrowthdeceleratingeverymonth

throughoutthethirdquarter.Thiswasmainlyduetothewaningeffectofthe"tradein"policyandpersistentlylower-than-expectedhouseholdincome,indicatingconsumerconfidenceremains

subdued.

Newsupplydecreasedby41%q-o-qand53%y-o-yto700,000sq.m.thisquarter,withnew

openingsrecordedonlyinshanghai,Nanjing,Guangzhou,andshenzhen.Netabsorptionwas

560,000sq.m.,down34%q-o-qand61%y-o-y.severalcities,includingBeijing,Hangzhou,andchengdu,recordednegativenetabsorptionduetotenantmixadjustmentsandlayout

reconfigurationsinshoppingmalls.consequently,nationalvacancyedgedup0.1pps.q-o-qto7.5%.Averagegroundfloorshoppingmallrentsdeclinedby0.6%q-o-q,withtherateofdeclineacceleratingduringthequarter.

F&Bexpansionslowsbutstillcontributes40%ofleasingvolume;outdoorsportsanddesignerbrandsboostretailactivityacrosscities

whileF&Bexpansionmoderatedslightlythisquarter,thesectorstillcontributedapproximately40%ofleasingvolume.Fastfood,bakery,beverage,andlocalcuisineswithloweraverage

spendingpercustomerremainedthemostprominentcategories.

FIGURE8:chinaRetailNewsupply,NetAbsorptionandvacancyRate

FIGURE9:vacancyRateandDevelopmentpipeline

outdoorsportsanddesignerbrandswereactiveinEasternandsouthernchinathisquarter.In

additiontopopularbrandssuchasunderArmour,onitsukaTiger,andBEAMS,theperiodalsosawkoreandesignerbrandwooyoungm,mountaineeringandskiing-focusedbrandEIDER,andgolf

equipmentbrandMunisingwearopentheirfirststoresornewconceptflagshipstoresincoreretailareassuchasshanghaixintiandi,chengduTaikooLi,andshenzhenFutiancentralDistrict.

Drivenbytheconsumptionconceptofemotionalself-fulfillment,interestintoysandcollectibles

remainedstrong.AlongsidestrongsalesofACGN(Anime,comics,Games,andNovels)products,thepopularplushtoybrandJellycatopenedpop-upstoresinshanghaiplaza66andBeijingchinaworldshoppingMallthisquarter.

FIGURE10:NewstoreopeningMomentumbyTradecategory

F&B●●.●●●

clothing......

Entertainment&TOY......

Lifestyle

cosmetics

Jewelry

NEV

source:CBREResearch,Q32025.

FIGURE11:chinashoppingMallGroundFloorRentalIndex4

source:CBREResearch,Q32025.

Rents

-13.9%y-o-y

vacancy

-3.0%y-o-y

Logistics

NetAbsorption+13.0%y-o-y

Double11stockpilingandmanufacturingboostdemandfor3PLsbutcross-bordere-commerceleasingslows

Nationwidenetabsorptionofwarehouseandlogisticsspacereached2.08millionsq.m.inQ32025,exceeding2millionsq.m.forthefourthconsecutivequarterbutdeclining20%q-o-q.

DrivenbyrobustDouble11inventorypreparationdemand,newleasingactivitysurgedfore-commercecloudwarehousesandlargeintegratede-commercelogisticsfacilities.Domestice-commerceand3PLSnewleasingspacerose38%q-o-q,accountingfor63%oftotalnewleasessignedduringthequarter.

Manufacturingtenantscontinuedtoexpandsteadily,withtheirshareofnewleasesincreasingby1.5

pps.q-o-qto18.6%,primarilydrivenbynewenergyvehicleandpartscompaniestakingupspaceintheshanghaimetropolitanarea,Beijingmetropolitanarea,chongqing,andchengdu.cross-bordere-

commerceactivitythisquarterwaslimitedtoaself-builtwarehouseadditioninzhaoqingandanexpansioninJiaxing.However,nosignificantleaseterminationsoccurredexceptforafewisolatedcasesinDongguan.

NewsupplyNetabsorptionvacancy(right)

source:CBREResearch,Q32025

FIGURE13:LogisticsvacancyRateinmajorcities

Q22025nQ32025

source:CBREResearch,Q32025.

FIGURE14:proportionofLeasedLogisticsspacebyIndustry

surgesinnewstockinGuangzhou-Foshanpushesupnewsupply

Newsupplyincreasedby26%q-o-qto1.77millionsq.m.,withGuangzhouandFoshancollectively

contributingover900,000sq.m.ofnewstockthisquarter.Amongothercities,onlyBeijing,Langfang,shanghai,suzhou,chengdu,andHuizhousawnewprojectsenterthemarket.

Thenationwidevacancyratedeclinedforafifthconsecutivequarter,dropping0.6pps.to18.8%.Allregionsexceptsouthchinasawvacancyratesdecreasethisquarter,furtherimprovingthesupplydemandbalance.vacancyratesinchengduandchongqingwithinthewestchinaregionhavenowreturnedtosingledigitterritory.

Rentaldeclinenarrowsinmultiplecities

Nationwidelogisticsrentsfell3.7%q-o-q,matchingthepreviousquarter'srateofdecline.Ningbo

remainedtheonlymarkettorecordrentalgrowth.southchinasawtheq-o-qdeclinewiden,with

GuangzhouandFoshanexperiencingsteeperdropsthanshenzhen,Dongguan,andHuizhoudueto

theirrelativelyearliersupplysurges.RentaldeclinesslowedinLangfang,Tianjin,wuhan,andkunshan,whiletherateofdeclineinchengduandchongqingnarrowedtounder1%.

source:CBREResearch,Q32025

FIGURE15:chinaIndustrialRentalIndex

overall——TierIcitiesTierIIcities

12341234123412341234123412341234123412341234123412341234123

201120122013201420152016201720182019202020212022202320242025

Investment

InvestmentTurnover-14.2%y-0-y

InvestmentTurnover-19.5%q-o-q

Datacentresattractincreasingdemand

Atotalof72commercialrealestatetransactionswithatotalvalueofRMB55.9billionwererecordedinQ32025.Thismarkeddecreasesof19%q-o-qand14%y-o-y,indicatingcautiousmarketinvestmentsentiment.

Theacquisitionof100%equityofchinaDatabyDongyangguangGroupcontributed50%of

transactionvaluethisquarter,propellingtheneweconomysectortotoppositionwitha64%

shareoftotaltransactionvolume.DrivenbythegrowthofAl,investmentindatacentresis

surging.overthepast12months,datacentrerelatedfundraisingthroughvariouschannels

suchaspublicREITsandABsexceededRMB15billion,withactiveparticipationfromdomesticinsuranceinstitutionsincludingchinaLife,CPIC,andDajia.

Diverserangeofinvestorsactivethisquarter

Thisquartersawinvolvementbynewtypesofcapitalsuchasnon-realestateenterprises,state-ownedplatforms,andprivatebuyers.ExcludingthechinaDatatransaction,theabove

mentionedinvestorscontributedinexcessofRMB15billionofinvestmentvolumeacross

variouspropertytypesincludingofficebuildings,hotelsandretailproperties.Majortransactionsincludedchangzhengvillage'sacquisitionofTcenterT1,zhouzhuangInvestment

Development'spurchaseofJinqiaovankevi-Hub,andanacquisitionofMix6byazhejiangprivateenterprise.

Institutionalinvestorscontinuedtofocusontheconsumptionandlivingsectors.Duringthe

quarter,GSUMFundacquiredchengduFlorentiavillage,whileshanghaistateownedstock

AssetsRevitalisingFundacquiredQiantanyongcui46RentalHosing.consequently,

transactionvolumesforretailpropertiesandrentalhousinginthefirstthreequartersincreasedby76%and55%y-o-y,respectively.Alsothisquarter,DajiaInsurancetogetherwithseveral

insurancecompaniesestablishedaRMB4.5billionrentalhousingfund,focusingonaffordablerentalhousingprojectsintierIcities.

FIGURE16:TransactionvolumebyMarket5

RMBbn

2025Q2

2025Q3

Note5:Transactionsincludedealsaboveus$10millionintheoffice,Retail,Mixed,Industrial,Hotelandothercommercialsectors.source:CBREResearch,RCA,Q32025.

FIGURE17:Transactionvolumebysectors

uoffice(ExcludedBusinesspark）uNewEconomyaRetailuMixeduHoteluothers

Moderatewideningofcapratesacrossassettypes

Duetocontinuedpressureontherentalincomesideforoffice,retailandlogisticsproperties,andwithsupply-demanddynamicsintheinvestmentmarketstillfavouringbuyers,thecapratesforthethreepropertytypesintierIcitieswidenedby5-20bpsthisquarter.whilethefive-yearLPRremainedunchangedduringtheperiod,thespreadbetweenaveragecapratesforvariousassettypesintierIcitiesandtheyieldon10-yeargovernmentbondsremainedhigh,atapproximately400bps.

FIGURE18:TierIcitiesAverageNetyields

officeRetailLogistics

outlook

OFFICE

CBRE's2025chinaofficeoccupiersurveyrevealedthathigheconomicandgeopolitical

uncertainty,coupledwithoccupiers'strongcost-containmentintentions,isdrivingastronger

preferenceforrenewalsandleaserestructures.However,expansionaryintentionsamongkey

demandenginesincludingTMT,finance,retailandconsumerservicesremainrelativelypositive.CBREthereforemaintainsacautiouslyoptimisticshort-termoutlookforofficedemandand

reiteratesitsforecastfor2025fullyearnetabsorptiontogrow20%to2.3millionsq.m.

Full-yearnationwideofficenewsupplyisprojectedtoreach4.2millionsq.m,pushingupthevacancyrateto24.6%byyear'send.Facerentsareforecastedtodeclineby11%overthefullyear.Newstockofnearly6millionsq.m.isduein2026,markingasupplypeakandensuringaprolongedrentaldecline.

RETAIL

Duetodelaysinconstruction,fullyearnewsupplyisexpectedtodropto2.9millionsq.m.,

markingthelowestlevelsince2020.However,thisimplieshighersupplyinthenexttwoyears,duringwhichapproximately8millionsq.m.ofpipelineprojectsduetocomeonstream.

CBRE'sseptember2025AsiapacificLeasingsentimentsurveyfoundthatretailerexpansionaryintentionsinmainlandchinahadmoderated(36%),whiletheneedfordownsizing(11%)and

leaserestructuring(11%)hadincreasedslightly.Intheshortterm,retailers'morecautious

expansionstrategiescoupledwithweakerconsumerconfidencewillcontinuetoexertdownwardpressureonshoppingmallrents.

LOGISTICS

Resilientexportscombinedwiththeseasonalupturninconsumptiondomestically,inEuropeandtheu.s.towardsyear'sendshouldensureleasingdemandfrom3PLsandmanufacturingremainsrobustinthe

shortterm.CBREanticipatesthatannualdemandforwarehouseswillreachahistoricpeakof

approximatelygmillionsq.m.forfullyear2025.Nearly3millionsq.m.ofnewsupplyinsouthchinaand1.5millionsq.m.inBeijing-Tianjin-LangfangwillbecompletedinQ42025,increasingdownward

pressureonrentsintheseregions.Inwesternandcentralchina,rentsareexpectedtostabiliseasvacancyratesgraduallyreturntoreasonablelevels.

INVESTMENT

capratesacrossvariousassetclassesareexpectedtocontinuefacingexpansionarypressureduetotheslowrecoveryofleasingfundamentalsandtheabsenceofimprovementinmarketliquidity.Theconsumptionandlivingsectorswillcontinuetoattractthebulkofinvestmentinthecomingquarters.Investorsareadvisedtotargetretailassetsthatfulfillresidents'dailyneedsandrentalapartmentsincorecities.opportunitiesforrepurposinginefficientcommercialofficebuildingsarealsoworth

considering.

Despiteongoingmarketuncertainty,china'sincreasinglydiversifiedinvestorstructurecombinedwiththecorrectioninassetpriceswillprovidesolidsupportfortransactionactivityinthemonthsahead.Full-yearchinarealestateinvestmentvolumeisprojectedtoriseby5-10%y-0-y.

Rentalcycle

FIGURE19:chinaofficeRentalcycleQ32025

Rentsatpeak

RentalDeclineslowing

RentsatTrough

Nanjingsuzhou,

Beijing,Tianjin

shanghai,Hangzhou

Guangzhoushenzhen,chengdu,wuhan

FIGURE20:chinaRetailRentalcycleQ32025

Rentsatpeak

RentalDeclineslowing

RentsatTrough

Bejing,Tianjin

shanghai,Nanjing

Hangzhou,Guangzhoushenzhen,chengdu

FIGURE21:chinaLogisticsRentalcycleQ32025

Jiaxing,suzhou

Rentsatpeak

Beijing,Dongguanchangshu,Foshan,Guangzhou,wuxi,Huizhou,shenzhen

RentalDeclineslowi