Empty shops, falling rents: commercial property takes a hit in China retail slump
South China Morning Post
by Cao LiFebruary 23, 2026
AI-Generated Deep Dive Summary
China’s commercial property sector is facing significant challenges as shop rents have fallen to levels not seen since 2018, reflecting a downturn in the retail industry. According to the China Index Academy, an independent real estate research firm, average rents across major commercial streets in key cities dropped to 24 yuan (US$3.50) per square metre per day in the second half of 2025—a decline that accelerated compared to previous periods. This trend highlights a broader shift in consumer behavior and economic conditions impacting China’s retail sector.
The report notes that weaker consumer spending has been a key factor driving this decline, as shoppers increasingly转向 online platforms for their purchases. E-commerce growth and shifting consumer preferences have contributed to the underperformance of physical retail spaces, particularly in urban areas. This trend is not isolated to smaller cities; even major commercial hubs like Beijing, Shanghai, and Guangzhou have seen rental rates drop significantly.
The situation underscores broader economic pressures facing China’s retail industry. With rising competition from online shopping platforms and a slowing economy, traditional brick-and-mortar stores are struggling to maintain their profitability. This shift is part of a larger global trend, where digital transformation is reshaping the retail landscape, leaving many physical retailers vulnerable to decline.
For investors and analysts, this data provides valuable insights into China’s economic health. The drop in rents signals weaker consumer demand and highlights the challenges faced by the retail sector in adapting to new market realities. As online shopping continues to dominate, the commercial property market is likely to face further headwinds, raising questions about the long-term viability of physical retail spaces.
This downturn also has broader implications for China’s economy,
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Originally published on South China Morning Post on 2/23/2026