Core Insights - The performance of Shenzhen's Grade A office market in the first half of 2025 shows a new supply of 235,000 square meters, which is below market expectations, leading to a total stock of 8.605 million square meters [1] - The vacancy rate for Grade A offices in Shenzhen slightly increased by 1.2 percentage points to 27.8% by the end of Q2 2025, indicating a temporary easing of upward pressure due to delayed supply [1] - Average rental prices for Grade A offices decreased by 5.3% to 160.1 yuan per square meter per month compared to the end of last year, driven by competitive pressures [1] Supply and Demand Dynamics - The delayed supply of new office projects has led to a temporary reduction in vacancy rate pressures, with many projects postponing their launch due to intense market competition [1] - The net absorption of Grade A office space in Shenzhen reached 68,000 square meters in the first half of 2025, supported by price advantages that facilitated the absorption of new and existing properties [1] Market Trends and Projections - By the end of 2027, the total stock of Grade A offices in Shenzhen is expected to exceed 10 million square meters, intensifying competition and further driving down office costs [2] - The composition of tenants in Grade A offices is anticipated to diversify, with an increasing proportion of emerging industries and operational businesses [2] Transaction Activity - In the first half of 2025, the total transaction volume for office properties in Shenzhen reached nearly 8 billion yuan, primarily driven by owner-occupiers, indicating sustained demand for self-use office space [2] - The market is seeing increased interest in industrial and commercial assets, with listed companies and state-owned enterprises being the main players in transactions [2] Renovation Costs - Despite rising renovation costs in major cities across the Asia-Pacific region, the growth rate has slowed down, with renovation costs for foreign enterprises in Shenzhen projected at approximately 4,200 yuan per square meter in 2024 [2]