What’s the Solution to the Dilemma of Office Building and Mall Leasing?

Despite the uncertainty in the business environment, some industries and enterprises are still able to grow against the trend.For example, hard-tech sectors like semiconductors, consumer electronics, and optical modules, as well as commodities such as non-ferrous metals, and fields like innovative pharmaceuticals. These industries together confirm a key business truth: true value creation always comes from the perfect combination of technological innovation and demand satisfaction. The state of business survival also presents a “tale of two extremes.” While some operators are still struggling along the breakeven line, industry leaders have already built impressive profit moats, such as CATL (Contemporary Amperex Technology Co. Limited), whose net profit exceeded 30 billion yuan in the first half of the year, showcasing the technical premium of a dominant player in the power battery industry. Even more astonishing is the innovation vitality in niche markets, such as the collectible toy derivatives market, where independent designers who design high-end custom clothing for Labubu (a popular designer toy) are now earning over 100,000 yuan per month—reflecting the business opportunities in the era of consumption segmentation. This kind of market divergence is also evident in the commercial real estate sector. For example, in the office building market, despite overall pressures and high vacancy rates, the rental rate for buildings in Shanghai’s Qiantan area remains above 90%. In the shopping mall sector, many malls are deserted, some even being sold off.

In early August, Apple shut down its first direct-operated store in mainland China (located at the Dalian Century City Shopping Mall), citing the departure of multiple retailers. However, flagship projects like Nanjing Deji Plaza, Hangzhou Hubin Intime in77, and Shanghai West Bund Dream Center continue to demonstrate the “customer flow siphoning effect,” creating a stark contrast. How should we interpret this increasingly intense “market schizophrenia”? From the “high vacancy rate” of winter to the “high conversion rate” of summer, where should businesses focus their efforts to break the deadlock?Dilemma: High Vacancy Rates and Leasing Anxiety Under Homogenized Supply.In today’s commercial real estate market, both office buildings and retail markets are under dual pressure from “incremental expansion” and “existing stock operation.” The cold data reveals the harsh reality: looking at the second quarter office building rental market this year, Beijing’s rent decreased by 4.0%, Shanghai by 3.1%, Guangzhou and Shenzhen by 2.9% and 3.1%, respectively. As for shopping malls, first-floor rents for quality retail properties in the first half of the year fell by 2.8%, an even larger decline than the same period last year (according to JLL’s Q2 2025 Real Estate Market Overview).

High vacancy rates have become a widespread issue hurting the industry. JLL’s office market index for 40 Chinese cities shows that in 2024, more than half of the top 20 cities saw vacancy rates for Grade A office buildings rise above 30%. This year’s outlook remains unoptimistic. For example, in Shanghai, the second quarter vacancy rate for Grade A office buildings was still 24.6% (according to JLL’s Q2 2025 Office Market Overview), showing no signs of easing. At the same time, the “supply flood” continues to press down: in the first half of 2025, 21 major cities recorded a total of 2.069 million square meters of new office supply (according to JLL statistics). The total number of malls nationwide has exceeded 7,000, but over 400 commercial projects are still planned to enter the market in the second half of 2025 (according to industry media statistics). When the marginal returns from “price wars” (decoration subsidies, rent inversion) diminish, what else can leasing teams do? Cost reduction, efficiency improvement, and precise targeting are key to survival. The biggest blue ocean might not lie in unmet demand, but in redefining and upgrading already satisfied needs.Insight: Corporate Profiles and Consumer Traits Must “Deeply Align”.In the organic system of cities, the vitality code for commercial office space is deeply embedded in the precise alignment of industry dynamics and consumer traffic patterns.

True forward-thinking operations not only capture the rising industries and corresponding corporate profiles but also understand the traits of the “people” behind the industries—their work rhythms, lifestyle preferences, and consumption habits. These insights create a deep resonance between corporate profiles, talent characteristics, and commercial support. The demand engine in today’s office and retail market is driven by technology, the internet, financial services, and professional services. The explosive potential of artificial intelligence has become the core driver for office space absorption in first and second-tier cities. However, industry clustering is only the starting point; it’s the retention of talent that ultimately determines success. Data shows that the new generation of the workforce has shifted to post-90s and post-00s individuals, who not only value the intelligence and comfort of office spaces but also seek seamless integration between work and life. This means office buildings need to move beyond the traditional “space leasing” logic and towards creating a closed-loop experience that covers “work-consumption-socialization.” Successful commercial office projects are essentially about precise ecosystem management. They need to weave industry characteristics, talent structure, and commercial facilities into a symbiotic network. For example, areas with clusters of tech companies often generate high-frequency demands for tech experience stores, quick dining options, elite social venues, and relaxation-focused consumption (e.g., massage, meditation spaces).

On the other hand, areas with concentrated legal and consulting firms rely heavily on high-quality dining, private meeting rooms, and customized services.Breaking the Deadlock: “Proactive Leasing” and “Precise Matching” Driven by Data Intelligence.How can the “corporate profile” and “consumer traits” truly align by integrating building data, consumer heat, and industry trends? The industry has largely agreed that proactive, data-driven strategies are key to breaking the deadlock. A recent study showed that high-quality digital tools could significantly optimize leasing decisions, shortening the average leasing cycle by 30-40%. However, the effectiveness of digital tools heavily depends on the comprehensiveness and timeliness of the data they rely on. If the data is outdated or incomplete, the resulting decisions are unlikely to hit the pain points, making it difficult to unlock critical leasing opportunities. In the commercial real estate sector, we’ve seen too many “data stories”—some are too dry to keep you awake, while others are too abstract to make a real impact. However, JLL’s proprietary “RuiJian Data” platform offers something different. Quietly, it’s extended its reach to over 80% of China’s second-tier cities, acting like a detailed net, collecting crucial market signals like rent, vacancy rates, and new supply. What’s remarkable is that this data is not “quickly generated” but accumulates from five continuous years of records—sufficient to tell a complete story in the ever-changing world of commercial real estate.