Chongqing Commercial Real Estate Faces Pressures as Market Shifts to Inventory-Driven Growth | Insights

Chongqing - Cushman & Wakefield's 2024 Annual Report on Chongqing's Office and Retail Market noted that China's real estate sector is adjusting due to macroeconomic pressures, regulatory oversight, and the shift from a growth-driven to an inventory-driven market.

From January to October 2024, unsold real estate in China rose 12.7% year over year, while newly started construction projects dropped 23%. This marks the end of the property market's explosive growth phase, shifting the focus to inventory as the sector moves away from rapid expansion.

Cushman & Wakefield data reveals that rental prices for Grade A offices in Chongqing fell 7.1% year-on-year in 2024 to 72.15 yuan per square meter per month. Vacancy rates increased by 1.82 percentage points, reaching 34.43%, putting further pressure on office space profitability.

Revitalizing dormant assets through innovative solutions

Jasmine Ma, Head of Consulting at Cushman & Wakefield’s Chongqing Office, emphasized that state-owned assets, vital components of the national economy, are key to ensuring stable economic growth and driving social development.

Jasmine Ma, Head of Consulting at Cushman & Wakefield’s Chongqing Office. (Photo/Cushman & Wakefield)

She explained that revitalizing these assets is crucial for improving infrastructure management, expanding social investment channels, increasing effective investment, and mitigating government debt and corporate liabilities. 

"The key to revitalizing these assets lies in non-standardized breakthroughs," she said. "By addressing issues such as property rights, hardware, operations, and partnerships, we can unlock the value of dormant assets."

TX Huaihai in Shanghai is a prime example of successful asset revitalization, transforming from a traditional shopping center into a dynamic retail destination. 

Ma added that its "curating culture first, then driving business" strategy has positioned it as a trendsetting cultural landmark. Each floor features unique themes to attract high-spending young consumers. The center’s open layout and curated brands create an immersive, exhibition-like experience.

TX Huaihai targets young buyers with trendy brands, events, and IP exhibitions, offering fresh content. A partnership with a professional asset manager and state-owned enterprise ensures ongoing support for planning, leasing, and management.

Strategy to become a global consumption hub

Ma stated that Chongqing can learn from successful international examples and has outlined several key initiatives to develop into an international consumption hub. 

First, by improving the quality of consumption spaces, the city aims to create high-quality, well-functioning, and distinctive international commercial areas that are globally competitive.

Jiefangbei Pedestrian Street in Chongqing. (Photo/Yin Shiyu)

An example of this is the renovation of Jiefangbei Pedestrian Street in Chongqing, which has transformed into an international commercial space that blends shopping, dining, entertainment, and cultural experiences, making it a key destination for both domestic and international tourists.

Second, the plan focuses on aggregating consumption resources, accelerating the attraction of leading market players and international brands, and facilitating the global allocation of consumption resources, thus forming a diverse and integrated consumption hub.

Finally, Chongqing is driving the growth of new digital consumption models, platforms, and channels. Through partnerships with various platforms, the city has created a digital ecosystem that enables local businesses and brands to expand their online reach, seamlessly blending traditional consumption with digital innovation. These efforts lay a strong foundation for Chongqing’s ambition to become a global consumption hub.