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INDEPENDENT MARKET STUDY (BEIJING & SHANGHAI)
BY JONES LANG LASALLE
I. Business Parks Market Commentary
China Macro Economic Overview
1. GDP
China’s economy has experienced a 20 year fast growth period
since 1990s. The average growth rate of GDP (Gross Domestic
Product) reached 16.9% from 2005 to 2011. Moving ahead, the
economy is expected to slowdown given the projected drop in
export growth and the central government shifting attention
to industry upgrading and structure adjustment to solve the
social issues brought about during the rapid development of
economy during the past years.
2. CPI
After the economy stimulation plan in 2009 and 2010,
overheated investment and excessive fuidity pushed the CPI
up to 5.4% by the end of 2011 despite government’s efforts
bring infation closer to 4%. Infation is expected to decelerate
in 2012 as impact of tighter monetary stance feeds through and
global commodity costs moderate.
3. FDI
Led and guided by the Open and Reform policy, China has
absorbed huge amount of foreign investment from other
countries in the world. Although total amount dropped to 95
billion USD in 2009 due to global fnancial crisis, FDI exceeded
100 billion USD for the frst time in history in 2010, thus showing
as China as the hottest investment location target in Asia Pacifc
region for both industrial enterprises and fnancial institutions.
Shanghai
4. Supply
Within Shanghai, there are three major state development
zones, Zhangjiang, Jinqiao and Caohejing, with similar
incentive policies. The main differentiating factors of a business
park space lies in the location and targeted industries of local
authorities.
Recently, due to the city’s evolution to the next stage of
industrialization which leads to encouragement in the
establishment of R&D centers and regional headquarters, new
business park areas such as Songjiang, Jiading, Baoshan start
to emerge.
Annual supply reached historical peak in 2007. A total of 75% of
supply is contributed from Zhangjiang (340,000 sqm), emerging
areas like Pujiang, Shibei (200,000 sqm) and Lujiazui Software
Park located in Pudong contributed another 210,000 sqm.
Shanghai Business Park Market Historical Supply
Historical Supply (‘000 sqm)
Resource by China Statistics Bureau
200
400
600
800
1,000
1,200
0 2005 before
2005
2006 2007 2008 2009 2010 2011 2012
Q1
35,713
148,002
395,324
1,006,658
664,332
532,917
377,547
47,000
896,532
China Historial FDI
Resource by China Statistics Bureau
FDI
Growth Rate
200
400
600
800
1,000
1,200
1,400 50.00%
40.00%
30.00%
10.00%
-10.00%
0.00%
0% 0 2005 2006 2007 2008 2009 2010 2011
1083.12
45.0%
950
1057.4
1160
11.3% 9.7%
724
630
747
-0.05%
-13.0%
18.6%
China GDP
GDP
Growth Rate
Resource by China Statistics Bureau
50,000.0
100,000.0
150,000.0
200,000.0
250,000.0
300,000.0
350,000.0
400,000.0
450,000.0
500,000.0 25%
20%
15%
10%
5%
0% 0.0 2005 2006 2007 2008 2009 2010 2011
184937.4
15.7%
216314.4
17.0%
265810.3
22.9%
340902.8
8.6%
314045.4
18.1%
401202.0
17.7%
471564.0
17.5%
GDP (100mil RMB)
‘000 sqm
FDI (‘000 USD) FDI Growth Rate
GDP Growth Rate
-12.3%
ASCENDAS REAL ESTATE INVESTMENT TRUST
ANNUAL REPORT FY11/12
92