How corporate headquarters reshape Shenzhen’s office market

Source: JLL South China Research

Headquarters in Shenzhen exhibit diverse operational modes, with variations in self-use portions, landlord’s core businesses, and real estate strategies. For instance, as of 2024, financial institutes and Technology, Media, and Telecom (TMT) firms own 50% and 25% of the total headquarters stock, respectively.

Despite recent escalating oversupply, the high headquarters proportion contributed approximately 40% to Shenzhen’s 847,000 sqm annual net absorption over the past five years, the highest among China’s four Tier-1 cities.

Headquarters require enhanced asset management.

Supported by self-use and leasing demand from upstream and downstream companies, headquarter properties have slightly outperformed other categories in occupancy rates. However, the recent increase in headquarter vacancy rates is particularly concerning, due to the surge in headquarter supply with a declining self-use ratio. Consequently, the headquarter rent decline has been the most pronounced among all.

In response to the ongoing supply-side pressures and demand-side changes, Shenzhen’s landlords are actively adjusting their leasing strategies. This approach aims to provide accessible, high-quality workplace solutions that contribute to industrial development. As market competition intensifies, HQ landlords must reassess the value of their headquarters assets from a more market-oriented perspective. This involves the need for professional property and asset management that attracts tenants and preserves property value by overseeing the entire lifecycle of commercial office properties.

Figure 3: The full lifecycle of asset management

Source: JLL South China Research