China sees flurry of commercial property deals as investors sniff out bargains
Major Chinese cities including Shanghai are witnessing a significant uptick in commercial property transactions, as investors snap up space in prime locations in the expectation that the market may finally be on the road to recovery. The value of office buildings, hotels and shopping malls across China has slumped in recent years amid a prolonged real estate crisis. But with prices in some cities…
Chinese cities, particularly Shanghai, are experiencing a surge in commercial property transactions, as investors rush to purchase prime real estate in anticipation of a potential market recovery. Office buildings, hotels, and shopping malls in China have experienced a significant decline in value over the past few years due to a prolonged real estate crisis.
However, prices in some cities are now stabilizing, prompting investors to seek out potential bargains. The introduction of China's first exchange-traded real estate investment trusts (REITs) backed by commercial properties has also contributed to the buying frenzy. Analysts believe that office prices have dropped 30-40% from their peaks, and further declines are unlikely.
In Shanghai, commercial property deals increased by 77% year on year in the first half of 2026, with a total transaction value of 27.4 billion yuan (US$4.05 billion). Over 60% of buyers were using the properties for their own purposes, typically in key locations along Shanghai's Inner Ring Road. The residential market has also shown signs of recovery, with over 31,000 pre-owned homes changing hands in Shanghai in March, marking the highest monthly total in five years.
Experts suggest that if the market maintains its momentum, more potential buyers will become optimistic about the real estate sector. In Beijing, commercial property transactions reached 25.7 billion yuan in the first half of the year, up 50% compared to the previous year. In Chengdu, deal values increased by 92.5% year-on-year.
International banks, such as Citigroup, have urged Beijing to implement stronger incentives, including interest-rate reductions, tax cuts, and buy-backs of idle land, to stimulate the slowing national economy. The introduction of the first four exchange-traded REITs backed by commercial properties on the Shanghai Stock Exchange has also boosted buying interest, particularly in mega shopping malls, as it enables developers and owners to diversify risks and generate regular dividends.
Written by urgent.news from SCMP Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
