Driven by Chinese companies going global and AI, Guangzhou Grade A office leasing net absorption volume increased by more than three times.

On July 1, Jones Lang LaSalle released the "Guangzhou Office Market Review and Outlook for the First Half of 2026," showing that demand for Grade A office buildings in Guangzhou continued to recover in H1 2026, with net absorption for leasing increasing by over 300% year-on-year. Although overall rents remain in a downward channel, the decline has been narrowing, and market activity has started to pick up.

Compared to the past reliance on finance, real estate, and traditional service industries to support office demand, what is more noteworthy about this recovery is the structural change in demand: the real driver of new demand is no longer traditional industries, but the expansion of emerging industries driven by the wave of Chinese companies going global and the spread of AI technology.

In the past few years, office markets in major cities across the country have generally faced the dual pressures of supply release and demand contraction, with companies reducing space and moving to lower costs becoming the main theme. Guangzhou was no exception.

But a new logic of differentiation has emerged in the market.

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-area leasing transactions, but most of this demand was for stock adjustments—that is, achieving cost optimization through relocation and consolidation, rather than true expansion.

What truly drove the rapid growth in new market absorption were emerging industries such as gaming, cosmetics, and cross-border e-commerce.

Data from Jones Lang LaSalle shows that in the first half of the year, these industries accounted for 65% of expansion and upgrade transactions, becoming the core source of new demand in the Guangzhou office market.

Behind this change, first and foremost, is that Chinese companies going global have entered a stage of organizational capability upgrading.

Jones Lang LaSalle noted that the momentum of Guangzhou's emerging industries going global is strong. In 2025, cross-border e-commerce import and export volume, cosmetics exports, and gaming overseas revenue all achieved double-digit high growth. The expansion of the global landscape has prompted company headquarters to accelerate the improvement of their mid- and back-office support systems, adding related functional positions, directly generating expanded demand for office space.

At the same time, AI is becoming another easily overlooked catalyst for demand.

Jones Lang LaSalle observed that thanks to AI technology, the marketing and operational efficiency of digital service providers such as Internet advertising and search services in Guangzhou has greatly improved, effectively reducing customer acquisition costs for emerging industries and further driving mid-tier companies and "hidden champions" to achieve performance leaps.

As they grow in scale, these companies are accelerating their clustering in core business districts, achieving talent sharing, information exchange, and industrial chain collaboration by being close to industry leaders, turning the agglomeration effect into efficiency advantages and innovation momentum, thereby driving upgrade demand for Grade A office properties.

Meanwhile, Jiang Jingli, Head of Commercial Real Estate at Jones Lang LaSalle Guangzhou, pointed out: "Emerging industry companies have clear preferences in site selection. They favor a vibrant office atmosphere and convenient commuting conditions, while also pursuing building operation capabilities. To meet the needs of round-the-clock, high-intensity business operations, value-added services such as after-hours air conditioning and 24-hour commercial amenities, as well as comprehensive operational support capabilities, have become key considerations in their leasing decisions."

From a regional perspective, emerging business districts such as Pazhou and Guangzhou International Financial City have become the biggest beneficiaries of this demand recovery. In the first half of the year, emerging industry tenants accounted for 45% of new transactions in emerging business districts, significantly higher than the 25% in traditional mature business districts.

At the same time as demand recovers, the pace of new supply in the Guangzhou Grade A office market has slowed, which has also helped ease market pressure to some extent.

In the first half of 2026, about 200k square meters of new Grade A office supply were added in Guangzhou, significantly lower than the 740k square meters in 2025. The slowdown in supply gave the market some breathing room, and the city's vacancy rate dropped from 22.9% at the end of 2025 to 22.6%. In Q1 and Q2, the city's quarter-on-quarter rental declines narrowed to 1.5% and 1.2%, respectively.

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

Jones Lang LaSalle expects that in the second half of the year, the market will still face about 600k square meters of new supply, and the vacancy rate is expected to remain under pressure. Although the downward trend in rents is unlikely to reverse in the short term, benefiting from the continued recovery in demand, the year-on-year decline in rents for the full year is expected to narrow compared to 2025.

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