Major Chinese cities, including Shanghai, are experiencing a notable increase in commercial property transactions as investors capitalize on signs of market stabilization amid a prolonged real estate downturn. The value of office buildings, hotels, and shopping centers across China has faced significant declines in recent years, but recent data indicate a potential recovery, attracting buyers seeking discounted assets.

Analysts attribute part of this renewed interest to the introduction of China’s first exchange-traded real estate investment trusts (REITs) backed by commercial properties, providing a fresh financing avenue for property owners. This innovation has supported transaction activity by enhancing liquidity in the sector.

Candice Wang, head of capital markets for eastern China at CBRE, noted that office asset prices have fallen sharply, by 30 to 40 percent from their peak levels. She added that the scope for further price declines appears limited, presenting a strategic opportunity for investors to enter the market in 2026.

In Shanghai, commercial property deals surged by 77 percent year-on-year in the first half of 2026, with total transaction value reaching 27.4 billion yuan (approximately HK$31.8 billion), according to CBRE. Office properties accounted for half of these deals, and 60 percent of buyers acquired assets for their own use rather than for speculative purposes.

A number of corporate buyers are acting on the expectation that office prices will soon reach their lowest levels after consecutive declines, prompting investments now to avoid higher costs in the future, said Sun Ling, head of JLL’s capital markets division in east China. Many of the purchases have concentrated on prime locations within Shanghai’s Inner Ring Road.

This rise in commercial property transactions mirrors a broader improvement in the residential real estate market. After six years of contraction, housing sales have shown signs of revival, with over 31,000 second-hand homes sold in Shanghai in March—the highest monthly volume recorded in five years, based on data from property agency Lianjia.

Overall, these developments suggest growing optimism among investors and market participants that China’s real estate sector, long mired in difficulties, may be approaching a turning point.