New supply in the 17 major cities totalled 1.96 million sq. m. in Q3 2019, a slight decline on a quarterly basis. Net absorption in Q3 rebounded slightly on a quarterly basis. Overall vacancy recorded to 21.5%. The TMT, traditional finance and professional services sectors are the main drivers of leasing transaction in this quarter.



Around 1.3 million sq.m. of new malls opened in Q3 with an average occupancy rate of 83.3%. China’s huge consumer market continues to lure new-to-market retailers, with 38 new brands opening stores this quarter, mostly in Shanghai and Beijing. Bridge brands and sportwear retailers were active. Café & tea shops continued to dominate the leasing demand of F&B segment.



Logistics demand improved seasonally in Q3 due to the upcoming Double 11, an online shopping festival. Net absorption recorded at 628 thousand sq. m., up 79%. The demand for cold chain is growing. Around 968 thousand sq. m. of new supply was delivered in Q3, up 29% q-o-q. Overall vacancy rate edged up to 12% amid large supply.


Capital market

Investment volume reached RMB 45.3 billion in Q3, up 6.7% q-o-q. As slower economic growth and weaker leasing activity prompts investors to turn more risk averse, investors focus on office assets and gateway cities.