China's AI Companies Boost Office Demand to 3x Year-Over-Year, Cutting Hangzhou and Shenzhen Vacancy Rates from 30% to 20%

According to UBS data reported by The Economist, China's AI companies' office space demand reached 3 times the level of last year's March. In response to the rise of DeepSeek and Alibaba's AI transformation, office vacancy rates in tech hubs like Hangzhou and Shenzhen have declined significantly from 30% at the end of 2025 to around 20%.

A Hangzhou court ruling in late April also contributed to office demand, as the court determined companies cannot directly use AI to replace employees. Additionally, AI companies' expansion has driven demand for office space from accounting firms, consulting firms, and law firms.