Despite the GBA’s economic recovery, the GBA Grade A office rental and price indices fell 1.9% and 1.6% in 2H/2021, due to the persistent global impacts of the Omicron variant, market oversupply, and developer's financial strains.

Compared to the early stage of the pandemic, office leasing demand recovered in 2021, with GBA annual net take-up expanding 2.5 times YoY and surpassing the pre-Covid level by 47.5% to 2.1 million sqm. Despite that, oversupply remained problematic for many cities as demand growth for some second- or third-tier cities remained limited, and new supply continued to be handed over. The GBA average vacancy rate therefore increased 0.1 ppt HoH to 21.3% by end-2021, up 0.5 ppt YoY.

Most landlords continued to offer rental concessions amid increasing challenges brought by the uncertain global economic environment and the long-lasting oversupply, with only Shenzhen able to record a rental increase in 2H/2021.

Four cities, namely Shenzhen, Dongguan, Jiangmen and Zhaoqing, also saw average occupancy costs increase in 2H/2021 as a result of rental increases, the addition of higher-grade buildings or the increase in property management fees.