Index Research Institute: The rental prices of commercial shops in key cities will continue to decline in 2025.

On February 23, the China Commercial Real Estate Rent Index Research Report for 2025 was released by the China Research Institute. In 2025, the consumer market saw steady growth, but the growth rate slowed down in the second half of the year. The policy of trading in old products for new ones drove rapid growth in retail sales of appliances/3C products and furniture, but overall growth in dining consumption slowed down. Most retail commercial projects still choose to reduce vacancies by exchanging price for quantity, leading to a widening drop in rental prices for shops in key cities. In the second half of 2025, the average rent for shops in major streets was 24.05 yuan/square meter/day, a decrease of 0.47% compared to the previous period, with a cumulative decrease of 0.81% for the whole year. Retail Rent Index Analysis Since 2025, the policies to boost consumption have had a positive effect, keeping the consumer market growing steadily. In 2025, China achieved a total social retail sales of consumer goods of 50.1 trillion yuan, an increase of 3.7% year-on-year. However, the monthly growth rate has been declining for 7 consecutive months since June. The policy of trading in old products for new ones has had a significant effect, with a 3.8% year-on-year growth in commodity retail sales in 2025, an increase of 0.6 percentage points compared to 2024; the expansion of service consumption policies has driven the potential for service consumption, with a 5.5% year-on-year increase in service retail sales, but the growth in dining revenue has slowed down to 3.2%. Most retail commercial projects are still choosing to reduce vacancies by exchanging price for quantity, continuing the downward trend in shop rents in key cities that started in the second half of 2024. 1. Street Shop Rents: In the second half of 2025, the average rent for shops on major commercial streets in key cities dropped by 0.81% year-on-year. Chart: Average rent and changes on major commercial streets in key cities nationwide from 2018 to 2025 Data source: China Real Estate Index System In 2025, service consumption maintained rapid growth, especially in cultural tourism related consumption, and city landmarks, or commercial streets with cultural tourism characteristics, experienced relatively stable customer flow and rent. The growth in dining revenue slowed down, combined with the impact of high-quality shopping centers, most commercial streets faced operational pressures, leading to declining rents. Based on survey data from samples of shop rentals on major commercial streets in 15 key cities nationwide, with samples of 100 shops on 100 commercial streets in key cities, the Hundred Street (Baijie) Shop Rent Index was established. In the second half of 2025, the average rent for shops on major commercial streets was 24.05 yuan/square meter/day, a decrease of 0.47% compared to the previous period, with a widening decline of 0.12 percentage points from the first half of 2025, and a cumulative decrease of 0.81% for the whole year, with a widening decline of 0.39 percentage points compared to 2024. 2. MALL Shop Rents: In the second half of 2025, the average rent for shops in major commercial areas (shopping centers) in key cities dropped by 0.34% year-on-year. Chart: Average rent and changes on major commercial areas (shopping centers) in key cities nationwide from 2018 to 2025 Data source: China Real Estate Index System In 2025, the consumer market operated steadily, driving the release of shop leasing demand. The operational situation of shopping centers was overall better than that of commercial streets, but most projects still chose to stabilize vacancy rates by trading price for quantity. Especially in commercial areas where new projects entered the market, existing projects faced competitive pressure and had to lower rents. Based on survey data from typical shop lease samples in major shopping centers in 15 key cities, with samples of 100 typical shopping center shops in key cities, the One Hundred MALL (BaiMALL) Shop Rent Index was established. In the second half of 2025, the average rent for shops in the Hundred MALL was 26.99 yuan/square meter/day, a decrease of 0.22% compared to the previous period, with a widening decline of 0.1 percentage points from the first half of 2025, and a cumulative decrease of 0.34% for the whole year, with a widening decline of 0.28 percentage points compared to 2024. 3. Rent Trends: Policies to boost consumption will continue to drive shop leasing demand, but there may continue to be downward pressure on rents in the short term. In 2025, the consumer market saw steady growth, but the growth rate slowed down in the second half of the year. The policy of trading in old products for new ones drove rapid growth in retail sales of appliances/3C products and furniture, but overall growth in dining consumption slowed down. Most retail commercial projects continued to choose to reduce vacancies by trading price for quantity, leading to a widening decline in shop rents in key cities. Looking ahead, the "Fifteenth Five-Year Plan Proposal" put forward the objective of "building a strong domestic market and accelerating the construction of a new development pattern." It emphasized the need to "adhere to the strategic focus on expanding domestic demand, persist in the combination of benefiting the people's livelihood, promoting consumption, investment in things, and investment in people, and promote the formation of an economic development model dominated by domestic demand, driven by consumption, and based on internal growth." As 2026 marks the beginning of the "Fifteenth Five-Year Plan," benefiting from policies that vigorously boost consumption and expand effective investment, retail commercial properties as carriers of consumption still have development potential, and the demand for shop leasing is expected to continue to be released. However, there may be continued downward pressure on rents in the short term. Retail business operators need to adapt to the trend, enhance operational capabilities, operate prudently, drive operations with digital technology and artificial intelligence to improve quality and productivity, and seize real estate financial opportunities to strengthen asset management capabilities and achieve high-quality development. 4. Market Performance in Key Cities: Consumption grows steadily, but incremental supply of physical retail is slowing down, with overall weak demand for shop leasing (1) Cities such as Chengdu and Shanghai have a total social retail sales growth rate higher than the national average, indicating fast-growing consumer markets. Table: Social retail sales and growth rate in representative cities in 2025 (Data source: Statistics bureaus of various cities, China Real Estate Index System) In 2025, the total social retail sales of consumer goods in Chongqing and Shanghai were relatively high, both exceeding 1.6 trillion yuan. Beijing, Chengdu, Guangzhou, and Shenzhen's total social retail sales were between 1.0-1.4 trillion yuan, indicating large consumer market potentials. Hangzhou, Wuhan, Nanjing, Qingdao, Changsha had total social retail sales between 500 billion to 1 trillion yuan, while Nanchang and Haikou had lower total social retail sales below 300 billion yuan. In terms of growth rate, Chengdu, Guangzhou, Shanghai, Wuhan, Changsha, and Hangzhou had a higher total social retail sales growth rate than the national average in 2025, indicating rapid growth in the consumer market, with more than half of the representative cities having a total social retail sales growth rate above 2024. (2) Both central and local governments have released a series of policies to boost consumption, supporting its growth. Efforts to boost consumption are the top priority in economic work in 2025, and this focus will be maintained throughout the "Fifteenth Five-Year Plan" period. In March, the State Council issued the "Special Action Plan to Boost Consumption," which deployed 30 action tasks in 8 aspects such as increasing the income of urban and rural residents, ensuring consumption capacity, improving quality and affordability of service consumption, and enhancing consumer confidence. The "Fifteenth Five-Year Plan Proposal" released in October and the Central Economic Work Conference held in December both emphasized the need to further implement the Special Action Plan to Boost Consumption. It is expected that in 2026, the support role of consumption in the economy may be further strengthened. Specifically, policies to support consumption stability and growth include enhancing the trade-in of old products for new ones, supporting steady consumption growth. In January, the National Development and Reform Commission and the Ministry of Finance issued a notice on the expansion of large-scale equipment renewal and the trade-in of old products for new ones in 2025, continuing to allocate special national long-term bonds to support the trade-in of old products for new ones, with funds being distributed to regions that have had good results in 2024 and expanding eligible consumer products for subsidies. By the end of September, 300 billion yuan of central funds had been allocated in four batches, with sales from the trade-in of old products for new ones in 2025 exceeding 2.6 trillion yuan, benefiting over 360 million people. In 2026, the trade-in of old products for new ones policy will continue to be implemented with optimizations in the support range, subsidy standards, and implementation processes, reflecting the characteristics of "accurate efforts to improve quality and efficiency." There is strong support for service consumption policies to unlock the potential of service consumption. In April, the Ministry of Commerce and other 9 departments issued the "2025 Work Plan for Service Consumption Quality Enhancement and Benefit to the People," including 48 specific measures to expand service supply, innovate diverse consumption scenarios, improve service quality, enhance consumer experience, and unleash the development potential of service consumption. In September, the Ministry of Commerce and other 9 departments jointly issued "Several Policy Measures on Expanding Service Consumption," proposing 19 tasks and measures focusing on cultivating service consumption promotion platforms, enriching high-quality service supply, stimulating new service consumption, strengthening financial support, improving statistical monitoring systems, and more. In January 2026, the Ministry of Commerce stated at a press conference that the efforts to enhance service consumption quality will continue, with a focus on fostering new growth points in service consumption. Additionally, in 2025, the central government also introduced policies related to automobile consumption, cultural tourism consumption, consumption in new sectors, accelerating the development of smart supply chains in the retail industry, improving urban commercial quality, innovations in the retail sector, building convenient life circles in cities, and nurturing international consumption center cities. Several supportive policies in finance, taxation, and finance have been rolled out. On May 7, the People's Bank of China and three other departments introduced the "Comprehensive Financial Policy to Support Market Stability and Expectation Stability," announcing policies such as interest rate and reserve ratio reductions, establishment of a 500 billion yuan service consumption and elderly care refinancing loan facility, sending strong signals to stabilize markets and expectations. As of the end of September 2025, the total loan balance in key service consumption areas in the country was 2.8 trillion yuan, with a year-on-year growth rate of 4.9%. In June, the People's Bank of China and 6 other departments jointly issued the "Guiding Opinions on Financial Support for Boosting and Expanding Consumption," proposing 19 key measures in six aspects such as supporting enhanced consumption capacity, expanding financial supply in consumption areas, unleashing consumer spending potential, enhancing consumption supply efficiency, optimizing consumption environment, and providing policy support and guarantee. In August, the Ministry of Finance and three other departments released the "Implementation Plan for Fiscal Interest Subsidies on Personal Consumption Loans," to better utilize fiscal funds to support and guide the boost in consumption and lower consumer credit costs. At the local level, various regions have aligned closely with central policy directions, focusing on boosting consumption as a key point, issuing relevant policies around service consumption, fostering emerging industries, nurturing international consumption centers, upgrading commercial districts, and more, to drive continuous recovery and upgrade of the consumption market. Overall, over the past three years, China has maintained a strategic focus on expanding domestic demand, with policies related to consumption transitioning from "recovery and expansion of consumption" to "promoting stable consumption growth" and eventually to "vigorously boosting consumption." The strength of policies has been increasing year by year, shifting from short-term impact mitigation to exploring and consolidating long-term growth momentum, and solidifying the position of consumption as the "main engine" of the economy. The policies have not only focused on increasing quality supply and innovative consumption scenes on the supply side but also introduced measures to enhance residents' consumption capabilities, stimulating market vitality and unlocking residents' consumption potential. During the "Fifteenth Five-Year Plan" period, China will continue to adhere to the strategic focus on expanding domestic demand, aiming to develop an economic growth model led by domestic demand and consumption-driven internal growth. As 2026 marks the beginning of the "Fifteenth Five-Year Plan," with the policy guidance of "adhering to domestic demand dominance and building a strong domestic market," efforts to boost consumption will remain a core approach to expanding domestic demand, with policies optimizing the implementation of trade-in of old products for new ones and fostering new growth points in service consumption expected to continue to be introduced, promoting steady growth in the consumption market. (3) Trends in Shop Supply in Key Cities: Decrease in the number of retail commercial projects in 15 cities, with a slowdown in increment, and a decrease in new development projects in the future Newly opened retail commercial projects: 131 new projects opened in 15 cities in 2025, a decrease of 18% compared to 2024 In 2025, the supply of retail commercial projects in 15 cities decreased, with a convergence towards first-tier cities, and existing projects being an important source of new projects. According to data from the China Index, in 2025, there were 131 new retail commercial projects opened in the main commercial areas of the 15 cities, a decrease of 28 compared to the same period in the previous year, covering an opening area of approximately 11 million square meters, a decrease of 19% year-on-year. Existing projects are now playing a more important role in driving new projects, with a total of 21 projects in the 15 cities being part of a restructuring of existing projects, accounting for 16% of the total. In terms of city grades, first-tier cities had 64 new retail commercial projects opened, a decrease of 7 compared to 2024, with an opening area of approximately 5.3 million square meters, a slight increase of 4% year-on-year. Among them, Shenzhen and Shanghai had relatively large new retail commercial projects, each being around 1.6 million square meters, while the new areas in Beijing and Guangzhou were within 1.3 million square meters. Second-tier representative cities had 67 new retail commercial projects opened, a decrease of 21 compared to 2024, with an opening area of approximately 5.8 million square meters, a 30% decrease year-on-year. Chongqing had a large new opening at 1.14 million square meters, with new areas in Wuhan, Hangzhou, Nanjing, Changsha, and Suzhou ranging between 60-100 million square meters, and those in Qingdao, Chengdu, Tianjin, and Nanchang below 350,000 square meters, with Haikou not monitoring new opening projects above 30,000 square meters. In terms of opening schedules, a total of 44 new retail commercial projects were opened in the first half of 2025 in 15 cities, accounting for 34% of the total for the year, with May being the peak month for openings (compared to June in 2024), with no new openings in February. In the second half of 2025, a total of 87 new retail commercial projects were opened in the 15 cities, accounting for 66% of the total for the year, following the same pattern as in 2024, with September and December being peak months for openings. Shop and Office Land: Leasing demand for premium office space continues to be strong, with excellent value in technology, media, and telecommunications (TMT) sectors Table: Social retail sales growth rates in representative cities in 2025 (Data source: Statistics bureaus of various cities, China Real Estate Index System) In 2025, the total social retail sales of consumer goods in cities like Chengdu and Shanghai saw growth rates higher than the national average, indicating a rapidly expanding consumer market. Office Space: Leasing demand in first-tier cities remains robust, with the exhibition of cultural tourism-related consumption on the rise. Retail consumption shows a slight slowdown, but remains a key indicator.ultureInfoop propertiescontinued decline, with a decline in rents set in motion since 2020. Office Rent Movement Analysis 1. Rent Change: In the fourth quarter of 2025, the average rent for office space in major business districts in key cities dropped by 0.44% compared to the previous quarter, with a cumulative decrease of 1.82% for the whole year. Chart: Average rent and changes in major business districts of office space in key cities nationwide from 2019 to 2025 Data source: China Real Estate Index System In 2025, some cities saw an increase in office space supply compared to 2024, but demand remained relatively weak, leading to an oversupply situation where the supply exceeds demand, resulting in a steady downward trend in office rents. According to survey data from sample leasing of office spaces in major business districts of 15 key cities nationwide, the average rent for office space in major districts was 4.53 yuan/square meter/day in the fourth quarter of 2025, a decrease of 0.44% compared to the previous quarter, with a widening decline of 0.11 percentage points compared to the third quarter, and a cumulative decrease of 1.82% for the whole year, with a narrowing decrease of 0.03 percentage points compared to the full year of 2024. 2. Rent Trend: The office space market may continue its adjustment trend, with continued downward pressure on rents in the short term. In December 2025, the Central Economic Work Conference emphasized the need to "focus on stabilizing employment, stabilizing enterprises, stabilizing markets, and stabilizing expectations, promoting economic upgrades in quality and efficiency, and the combination of innovation-driven development, accelerate the cultivation and growth of new drivers of growth, and deepen "AI+"." From the demand side, it is expected that macroeconomic policies will continue to be attentive to ensuring economic stability and quality improvement, providing support for the recovery of the office space market, with demands from industries in digital economy, artificial intelligence, and other productive sectors anticipated to boost office leasing. However, such demands are not sufficient to stabilize the overall office space market. With overall weak demand for office spaces in key cities, the market may continue its adjustment trend in 2026, with downward pressure on rents persisting. In the era of existing projects, competition in office spaces has shifted from "space leasing" to "value operation." Office space operators need to pay attention to industrial ecology construction and service system upgrades, focusing on industries in technology, finance, professional services, advanced manufacturing, bio-medicine, attracting high-quality tenants. Concurrently, they should consider updating and transforming existing projects by introducing commercial and hotel formats, enriching facilities, increasing asset value, and creating resilient assets that can withstand market cycles. 3. Office Space Demand Trends in Key Cities: Rising vacancy rates in grade A office spaces in cities like Nanjing and Chengdu