Under the influence of Chinese enterprises going global and AI, the net absorption of Grade A office leasing in Guangzhou has increased by more than three times.

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On July 1st, JLL released the "Review and Outlook of the Guangzhou Real Estate Market for the First Half of 2026," showing that demand in the Guangzhou Grade A office market continued to recover in the first half of 2026, with net absorption for leasing types increasing more than 300% year-on-year. Although overall rents are still in a downward trend, the decline has continuously narrowed, and market activity is starting to rebound.

Compared to the past dependence on finance, real estate, and traditional service industries to support office demand, what deserves more attention in this round of recovery is the change in the demand structure: the real driver of new demand is no longer the traditional industries, but the expansion of emerging industries jointly fueled by the wave of Chinese enterprises going global and the spread of AI technology.

In recent years, the office markets in core cities nationwide have generally faced dual pressures from supply release and demand contraction, with enterprises reducing space and relocating to cut costs as the main theme. Guangzhou was no exception.

However, a new logic of market differentiation has emerged.

Looking at the transaction structure, in the first half of 2026, traditional industries such as financial institutions, law firms, and retail still contributed about one-third of large leasing transactions, but most of these demands were adjustments of existing stock, i.e., cost optimization via relocation or consolidation, rather than genuine expansion in the true sense.

What truly drove the rapid growth in new market absorption was emerging industries like gaming, beauty, and cross-border e-commerce.

JLL data shows that in the first half of the year, these industries accounted for 65% of expansion-type and upgrading-type transactions, already becoming the core source of new demand in the Guangzhou office market.

Behind this change, the first driving force is Chinese enterprises entering the stage of organizational capability upgrades as they go global.

JLL mentioned that Guangzhou's emerging industries have strong momentum in going overseas, with cross-border e-commerce import and export volume, beauty export, and gaming overseas revenue all achieving double-digit growth in 2025. The expansion of their global footprint prompted enterprise headquarters to accelerate improvement of back-end support systems, add relevant functional positions, directly leading to demand for expanded office space.

Meanwhile, AI is becoming another catalyst for demand that's easily overlooked.

JLL observed that, thanks to AI technology, the marketing and operating efficiency of Guangzhou's digital service providers such as internet advertising and search services has greatly improved, effectively lowering customer acquisition costs for emerging industries and further promoting performance leaps for mid-tier enterprises and “hidden champions.”

As their scale grows, such enterprises are rapidly gathering in core business districts, achieving talent sharing, information exchange, and industry chain collaboration by being close to industry leaders, thereby turning location clustering effects into efficiency advantages and innovation momentum, which in turn drives the demand for upgrading Grade A office properties.

At the same time, Jiang Jingli, head of JLL Guangzhou Commercial Real Estate Department, pointed out: "Emerging industry enterprises have distinctive preferences in site selection, favoring vibrant office environments and convenient commuting conditions, as well as building operation service capabilities. To cope with the demands of round-the-clock and high-intensity business operations, value-added services such as extended air conditioning hours, 24-hour commercial facilities, and comprehensive operation support capacity have become critical factors in their leasing decisions."

From the perspective of specific areas, Pazhou and Guangzhou International Finance City, as emerging business districts, have become the biggest beneficiaries of this round of demand recovery. In the first half of the year, tenants from emerging industries accounted for 45% of new transactions in emerging business districts, significantly higher than the 25% in traditional mature business districts.

While demand is recovering, the pace of new supply in Guangzhou's Grade A office market has slowed, easing market pressure to some extent.

In the first half of 2026, Guangzhou added about 200,000 square meters of Grade A office supply, significantly less than the 740,000 square meters in 2025. The slowdown in supply gave the market a chance to catch its breath, as the citywide vacancy rate fell from 22.9% at the end of 2025 to 22.6%; the rent decline narrowed to 1.5% and 1.2% quarter-on-quarter in the first and second quarters, respectively.

However, this does not mean that the Guangzhou office market has emerged from its cycle.

JLL expects about 600,000 square meters of new supply to enter the market in the second half of the year, with the vacancy rate expected to remain under pressure. Although the downward trend in rents is hard to reverse in the short term, thanks to the continued recovery on the demand side, the full-year rental decline is expected to narrow compared with 2025.

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