2026-01-09 11:40Investment Rating - The report indicates a continued downward trend in the Shenzhen Grade A office market, with rental prices under pressure and a high vacancy rate, suggesting a cautious investment outlook for the sector [3][5]. Core Insights - The Shenzhen Grade A office market is experiencing significant adjustments, with average effective rents declining to RMB 148.4 per square meter per month, a 2.2% decrease from the previous quarter [3][8]. - The market is characterized by an imbalance between supply and demand, with new supply reaching approximately 219,000 square meters, the highest level this year, while net absorption was only 68,000 square meters, leading to a vacancy rate of 26.1% [3][12]. - The TMT sector remains dominant, accounting for 52.0% of leasing transactions, driven primarily by internet platforms and software development companies [4][12]. Supply and Demand - New supply surged in the third quarter, with major projects like the headquarters of various companies entering the market, while demand has significantly slowed, resulting in a structural oversupply [12]. - The demand structure shows a strong focus on the TMT sector, with professional services and healthcare also contributing to leasing activity [12][4]. - The overall market activity is low, with relocation needs dominating at 77.0%, but the proportion of upgrade relocations has decreased to 31.3%, indicating a trend towards cost control [13]. Rental Trends - Rental prices continue to decline, with the most significant drop observed in the Bao'an submarket at 5.8% [8][11]. - The report anticipates that rental prices will remain under pressure in the fourth quarter, with landlords expected to adopt strategies such as price adjustments and incentives to attract tenants [9][5]. Investment Market - The investment market remains subdued, with only one notable transaction recorded, where China Merchants Shekou transferred a property for RMB 716 million, reflecting a focus on asset optimization and cash flow [19]. - The overall transaction activity is low, with self-use buyers and industrial capital being the primary market participants, indicating a shift towards long-term value preservation [19].