Share: Share on Facebook Share on Twitter Share on LinkedIn I recommend visiting to read:%0A%0A {0} %0A%0A {1}

Greater China Office Demand remains resilient however continued supply is on the horizon

Mandy Qian • 01/04/2021

GC-Supply-DemandCushman & Wakefield (NYSE: CWK), a leading global real estate services firm today released its report 2021 Greater China Office Supply/Demand. According to the report, market uncertainty brought on by the COVID-19 epidemic has impacted both Grade A office supply and Grade A office demand in Greater China. By Q4 2020, the total Grade A office inventory in the core markets of the 20 major cities in Greater China we track totaled 59,794,319 sq m, a 6.5% rise year-on-year (y-o-y). In the meantime, total premium core city office net absorption across the Greater China market in Q4 2020 was 821,370 sq m, amounting to a 65% increase compared to Q3 2020. Among the six major cities in the region, Taipei registered the lowest vacancy rate, at 2.6%, and as for the tier-2 city group, Hangzhou recorded the lowest vacancy rate at 12.8%.

Shaun Brodie, Head of Occupier Research, Greater China at Cushman & Wakefield, said: “The volume of quality office supply in many cities in Greater China is expected to enter a peak period next year. Between 2021-2025, much of the 33,924,163 sq m of future supply expected to complete will land in non-core locations, which will continue to drive decentralization as a number of tenants seek quality space at a discounted rental. “

The supply/demand rundown for 20 city core area-level markets in Greater China (Q4 2020)


Jonathan Wei, Managing Director, Head of Project & Occupier Services, China at Cushman & Wakefield, said: “ Looking to the year ahead, considering the economy, policy direction and the COVID-19 outbreak and its impact on home/remote working, we believe overall prime office demand is likely to be resilient in Greater China when compared to other markets around the world. There will be bright spots as well where office absorption has the potential to further drive positive numbers in some city markets. These bright spots are largely derived from industry sectors that have seen new business opportunities or have the potential to realize business growth, given the commercial, societal and lifestyle changes brought on by COVID-19, as well as government policy directives. These industry sectors are: the financial sector; the technology, media and telecommunications (TMT) sector, and; the healthcare sector.”

In 2021, we also expect co-working office providers to enter a period of solidification and maturity, which will further stabilize office leasing in the Greater China region. 

Looking at the individual major gateway cities in Greater China, Grade A office market demand performance in 2020 generally turned out to better than expected. Into 2021, we expect a number of factors, including the state of the general economy, government policy and individual city initiatives, to help drive continued demand:    


In 2020, due to the impact of COVID-19, many project completions were delayed, which has resulted in new supply in Beijing's Grade A office market dropping 17.7% y-o-y to 837,375 sq m.

Citywide net absorption reached 215,975 sq m in Q4, 2.56 times the total volume of the first three quarters, thus bringing the overall net absorption for the city to 300,285 sq m for the year. 

The ‘Beijing Action Plan for Promoting the Innovation and Development of the Digital Economy (2020-2022)’, launched in September 2020. Under the plan, by 2022, Beijing will become a pilot city and demonstration zone for the development of the national digital economy, with the value-added amount stemming from the digital economy predicted to account for 55% of Beijing’s GDP. In the future, with the opening up of the Services industry and implementation of the Beijing Free Trade Zone policy, related industries, such as cloud computing, big data, artificial intelligence, blockchain, Internet of Things, fintech and high-end services industries will usher in more development opportunities, and will also generate more leasing demand within the Beijing office market.


In 2020, a total of 875,463 sq m of quality Grade A office space was added to the Shanghai office market, of which 42.3% landed in the city’s core area, and 57.7% in the non-core area.

In 2020, despite the nationwide gloomy economic and office market performance in Q1, the Grade A office market in Shanghai finished the year by recording a net absorption total of 463,217 sq m, a 71.3% increase y-o-y. Core area net absorption throughout the year in the city accounted for 25.9% of the overall net absorption, while the non-core areas made up 74.1% of the total. Domestic enterprises remained the dominant force in the prime office leasing market, contributing to approximately 63.4% of completed leasing deals by area, while multi-national companies (MNCs) accounted for a 36.6% share of deals by area in Shanghai.

The aftermath of the epidemic is likely to reshape some business sectors by accelerating industry development and growth and, in turn, office demand. Some industries that fall into this category include TMT, Healthcare, Online Education, Insurance, Retail (especially those with online platforms) and Logistics, and it is these industry sectors which are likely to be active in the Shanghai prime office leasing market in 2021.


Shenzhen welcomed a total of 762,000 sq m of new supply through 2020. All new supply completed in the city’s core area, pushing up the stock of the core area to 6.02 million sq m, while the stock of the non-core area maintained a total stock figure of 268,000 sq m.

Leasing activity gradually resumed as the pandemic came under control in Q2. The market saw office demand stimulated by the new supply in H2 2020. The new supply entering throughout 2020, up 42.3% y-o-y, has simultaneously enabled a yearly net absorption of 403,284 sq m, a leap of 296.4% y-o-y.

Domestic enterprises remained the driving force of leasing demand in Shenzhen, accounting for 93% of the total leased space in 2020, while MNCs took up 7% as they held a cautious business attitude amid COVID-19. Notably, in 2020, domestic tech giants led some sizable deals, even en-block building leasing transactions which drove the domestic share of total leasing deals by area to be higher than usual.

Looking ahead, 1.79 million sq m of new supply is scheduled for completion in 2021, although delays could trim delivery to around 1 million sq m. The influx will certainly provide a greater choice for potential occupiers.


Three new Grade A office projects entered the market in 2020, with a combined 231,000 sq m of quality office space, boosting the yearly new supply by 140% y-o-y, and bringing citywide Grade A office stock to 5.2 million sq m.

Under the effective control of the epidemic, the market picked up significantly in H2, and some performing enterprises took this opportunity to seek office expansion, mainly by relocating and upgrading with single or even multi-storey leasing areas. Leasing demand for over 2,000 sq m of space accounted for 57.6% of the total volume of transactions. With favorable industrial planning policies and the improved amenities, the up-and-coming emerging submarkets in Guangzhou  recorded a net absorption total of 96,487 sq m in 2020.

The optimistic outlook for the post-pandemic market, topped with the economic stimulus policies introduced by the government, are plus factors to help drive confidence and positive economic growth. Local governments are also likely to further publish favorable policies supporting business and stimulating demand for office leasing in 2021.

Hong Kong

In 2020, new office supply shrank by 88% compared with the previous year. With only one project coming online, Grade A office stock increased by just 25,595 sq m, the lowest amount in the past decade.

Given the weakened economy amidst the pandemic, leasing activity in the year was largely supported by consolidation and relocation requirements as occupiers prioritized cost savings. In particular, demand from MNCs weakened with their share of new leases deteriorating to 49% in 2020 from 54% in 2019. In contrast, demand from domestic firms remained relatively resilient, led by several new leases by PRC firms in Greater Central in the year.

Medium-term, the office leasing market is forecast to increasingly benefit from the booming Hong Kong IPO market as well as opportunities generated by the further growth of the GBA. Despite the prevailing uncertainties amidst the COVID-19 outbreak and geopolitical tensions, the Hong Kong IPO market remained strong with the total IPO proceeds raised up 26.5% y-o-y in 2020 to HKD 397.5 billion, the highest level on record. This trend is expected to continue, driven heavily by mainland Chinese technology firms as well as secondary listings by some currently listed in the U.S. Meanwhile, as the pandemic recedes, Hong Kong’s further integration into the GBA and increasing market access should create new opportunities for firms based in the city. Both trends are expected to drive increasing demand for office space, especially by firms in the Finance and Professional Services sectors.


In 2020, only one Grade A office building was launched. Upon launching, Taiwan Life Insurance Zhongshan Building, added 21,600 sq m to the Western submarket of the Taipei Grade A office market.

In 2020, with very limited new supply entering the market, full-year net absorption concluded at 20,500 sq m, dropping below 30,000 sq m for the first time since 2009. 

In the face of the ongoing global pandemic, firms were also adopting corporate policies to allow employees to work from home or to take flexible leasing options within co-working centers. Enterprises adopted a wait-and-see attitude in response to increasing uncertainty in the global economy. MNCs contributed approximately 48% of completed leasing deals by area, while domestic enterprises accounted for a 52% share of deals by area in Taipei in 2020.

Ahead, the Taipei Grade A office market is scheduled to welcome 210,000 sq m of future new supply, yet most of this is slated for self-occupied use for financial firms. 

Despite the scarcity of new space, we do not expect to see a pre-leasing boom, as international firms remain conservative under continuing economic uncertainty. In the short-term, office market leasing activities are forecast to remain stable.

For more details, please click here External Link to download the report

About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 53,000 employees in 400 offices and 60 countries. Across Greater China, 22 offices are servicing the local market. The company won four of the top awards in the Euromoney Survey 2017, 2018 and 2020 in the categories of Overall, Agency Letting/Sales, Valuation and Research in China. In 2019, the firm had revenue of $ 8.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit or follow @CushWake External Link on Twitter.


Media Contact

Mandy Qian (image)
Mandy Qian

Head of Business Development Services, North China & Greater China Communications • Dongguan

With your permission we and our partners would like to use cookies in order to access and record information and process personal data, such as unique identifiers and standard information sent by a device to ensure our website performs as expected, to develop and improve our products, and for advertising and insight purposes.

Alternatively click on More Options and select your preferences before providing or refusing consent. Some processing of your personal data may not require your consent, but you have a right to object to such processing.

You can change your preferences at any time by returning to this site or clicking on Privacy & Cookies.
These cookies ensure that our website performs as expected,for example website traffic load is balanced across our servers to prevent our website from crashing during particularly high usage.
These cookies allow our website to remember choices you make (such as your user name, language or the region you are in) and provide enhanced features. These cookies do not gather any information about you that could be used for advertising or remember where you have been on the internet.
These cookies allow us to work with our marketing partners to understand which ads or links you have clicked on before arriving on our website or to help us make our advertising more relevant to you.
Agree All
Reject All