Market Overview - In the first half of the year, the market saw a significant supply of 420,000 square meters entering in the second quarter, leading to a total stock increase of 5.7% to 7.783 million square meters [1] - The net absorption in the second quarter rebounded significantly, reaching three times the average level of the past five years, driven by the large-scale new supply [1] - Despite this, the overall average vacancy rate slightly increased by 0.4 percentage points to 7.1% due to the lower occupancy rates of some new projects compared to the existing average [1] Shenzhen Retail Market Insights - The vacancy rate below 10% is considered a healthy level, with notable highlights in the Shenzhen market including stable consumption and unique supply characteristics [2] - New projects and renovations, such as K11 and Garden City, have shown strong consumer attraction and operational adjustments, despite temporarily increasing vacancy rates [2] - The performance of retail properties in Shenzhen is better than in Guangzhou, with significant attention on the first stores in key shopping malls [2] Demand and Rental Trends - In the first half of the year, the restaurant sector remained the primary source of demand, although the proportion of new restaurant openings decreased by nearly 5 percentage points in the second quarter compared to the first [2] - Continuous upgrades of quality existing projects have introduced multiple first stores in various regions, enhancing the diversity of retail brands in Shenzhen [2] - Rental expectations from owners remained stable, with the rental index unchanged quarter-on-quarter but down 1.6% year-on-year, averaging RMB 523.6 per square meter per month [2] Future Supply Outlook - Looking ahead to the second half of 2025, over 450,000 square meters of new supply is expected, with total stock projected to increase by 11.8% year-on-year, surpassing 8 million square meters [3] - Two new projects are anticipated to open in the third quarter, contributing a total of 225,000 square meters of supply [3] - The ongoing brand placements and upgrades in existing benchmark projects are expected to attract more emerging popular brands favored by consumers [3]