Core Insights - The overall leasing activity in Shenzhen's Grade A office market has declined in Q3, with net absorption at approximately 125,000 square meters and continued downward pressure on rental prices [1][2] - Some companies are taking advantage of the rental price adjustments to upgrade their office spaces in a cost-effective manner, while the development of overseas markets and technology companies is driving structural recovery in demand [1][4] Supply and Demand Dynamics - In Q3, six new projects were launched in Shenzhen, adding about 380,000 square meters of supply, which increased the overall vacancy rate by 1.1 percentage points to 27.6% [2] - The vacancy rate in the existing market remains relatively stable, with some non-core areas attracting tenants due to competitive leasing conditions [2] - Companies are adopting cautious leasing strategies focused on cost control and space efficiency, leading to more negotiations for lease restructuring [2][3] Sector-Specific Demand - Technology companies remain the primary demand drivers in Shenzhen's office market, accounting for about 30% of leasing transactions, with active segments including consumer electronics, AI applications, and digital marketing [3] - Financial institutions, particularly securities and insurance firms, continue to show some leasing demand, while demand from professional services remains subdued [3] Emerging Trends - Shenzhen's consumer electronics companies are increasingly expanding overseas, becoming a new driving force for office market demand, with several firms leasing or upgrading to Grade A offices for overseas marketing and brand management [4] - The market is expected to see over 1 million square meters of new Grade A office supply in the next 12 months, while some financial and tech firms may reduce their leased space due to moving back to self-built headquarters [4] Policy Developments - Recent policies in Shenzhen encourage flexible adjustments of existing office building uses, allowing for temporary conversions to hotels, medical facilities, and affordable housing, which may help diversify office operations and alleviate vacancy pressures [5]