Shanghai's commercial real estate market demonstrated continued recovery in activity during the second quarter of 2026, with overall leasing demand and investment interest in major transactions showing further improvement. Jones Lang LaSalle Shanghai's Commercial Real Estate Department Director and East China Retail Property Head, Huang Zhen, stated, "In Q2 2026, demand for Shanghai's Grade A office market continued to recover, with the proportion of large-area transactions increasing. The rate of rental decline narrowed, although overall rental performance remains divergent."
In the retail property sector, overall net absorption saw a significant rebound, aided by the strong leasing performance of newly opened projects in the second quarter. The "large-store trend" reflects the scaling and benchmark-setting moves by leading brands. For logistics real estate, the leasing market remained active, with tenants continuing to optimize their warehouse layouts amid a market environment of persistently declining rents, though sub-markets maintained a divergent trend.
In the investment market, a total of 27 major transactions were recorded, with the transaction volume increasing by 14% compared to the same period last year. The hotel market also performed well in the first half of 2026, with Shanghai experiencing growth in both volume and price alongside steady visitor traffic and continuously improving performance.
Data indicates that leasing activity in Shanghai's Grade A office market continued to recover in the second quarter of 2026. The city's net absorption reached 232,000 square meters. Zhu Xidong, Deputy Director of Shanghai Commercial Real Estate at JLL, noted, "Leasing activity continues to improve, with upgrade-driven demand consistently benefiting the overall market. Some high-quality projects have attracted particularly active leasing interest."
Net absorption in the Central Business District was recorded at 106,000 square meters, with financial and professional services firms remaining the primary source of demand. The non-CBD market recorded a net absorption of 126,000 square meters, with technology and internet companies, particularly those in gaming and artificial intelligence, maintaining their leasing momentum.
A notable trend in the first half of 2026 was the continuation of a "large-store wave" in Shanghai's core retail areas. Super-flagship stores spanning thousands of square meters, such as the Dolby Zhangyuan Global First Flagship Experience Center and the Hyundai Motor Jing'an Temple UX Studio, opened one after another.
According to JLL Research data, from the second half of 2024 to the first half of 2026, Shanghai has seen the opening of over 20 large flagship stores from leading brands, with an average area exceeding 1,100 square meters. This not only confirms a significant increase in the number of large stores but also reflects the trend towards store scaling and benchmark establishment.
Huang Zhen commented, "A growing number of brands are redefining offline value through super-large-format stores. These large stores are no longer just venues for 'selling goods' but have become exhibition halls for brand concepts, living rooms for user social interaction, and experience spaces for lifestyles."
Huang Zhen added, "It is expected that consumers' continued focus on healthy living, emotional value, and rational consumption will deepen further. These consumption trends will provide stable support for leasing demand in sectors such as sportswear, trendy toys, digital electronics, and affordable dining."
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