7. Business Parks Market Outlook
Shanghai continued to host the largest concentration of
foreign investment-type companies, regional headquarters,
and R&D centres in mainland China. Official data shows that
contracted FDI reached USD 29.4 billion in the first eleven
months of 2014, with 44.4 percent of the total inflow directed
to tertiary industry.
Supply is expected to spike in 2015, with nearly 1.4 million
square metres of new supply scheduled, including Chamtime
in Zhangjiang, Headquarters Park Phase II and Shanghai
Business Park Phase III-1/2/3 in Caohejing, and the 11-3
NCN Office Building in Linkong. Though the volume of new
supply will be a record high and will cause the vacancy rate to
increase in the short-term, the nature of the supply (nearly 60
percent will be located in Caohejing and Zhangjiang, where
demand is historically strong) and the ongoing development
of Shanghai’s modern service sector will drive the absorption
of much of this new supply.
Improved transportation accessibility as well as higher
building specifications will support average rental growth
despite the spike in supply, though this will vary substantially
by submarket. In the investment market, capital values and
yields are expected to be largely stable in the near term.
However, the outlook for the business park market is forecast
to be positive.
Looking forward, it is likely that Shanghai business parks will
remain a popular choice for local and international companies
alike. Local governments are likely to continue to invest in
high quality infrastructure to support the development of
such areas, and, as momentum continues to grow, companies
in search of large contiguous spaces and competitive rental
levels may well have little alternative if they wish to remain in
the Shanghai area.
Likewise, smaller start-up firms are likely to be established in
these areas. Low rentals in business parks used to be a large
attraction to companies to set up entities. Until now it remains
a strong incentive, however, the main incentives now are
government’s preferential and economic stimulation policies
in business park areas and the locational advantages of being
an industrial cluster.
Large Chinese companies are likely to continue the trend of
purchasing buildings or sites for their headquarters or research
and development buildings but it is also likely that leasing
activity from such companies will continue to grow.
INDEPENDENT MARKET STUDY (SHANGHAI & BEIJING)
By Colliers International Property Consultants (Shanghai) Co. Ltd.
BEIJING BUSINESS PARK
1. Macroeconomic Highlights
Beijing’s economy maintained stable growth in 2014. The total
output of gross domestic product (“GDP”) reached RMB 2,133
billion by the end of the year, an increase of 9 percent over the
previous year. GDP per capita grew 6 percent to RMB 99,121.
The output of tertiary industry increased to RMB 1,663 billion,
a 10.9 percent rise year on year, while the total value of
secondary industry rose 4.4 percent to RMB 455 billion.
Figure 1: Beijing GDP and GDP Growth (2008 to 2014)
Source: Beijing Statistics Bureau
In 2014, Beijing’s fixed asset investment grew to RMB 756
billion, an increase of 7.5 percent over the previous year. Real
estate investment climbed 12.3 percent to RMB 391 billion,
accounting for 51.7 percent of total fixed asset investment.
Figure 2: Beijing Fixed Asset Investment and Real Estate
Investment (2008 to 2014)
Source: Beijing Statistics Bureau
Beijing’s total import-export value decreased 3.3 percent year on
year to USD 416 billion in 2014. The total value of exports decreased
1.2 percent over the previous year to USD 62 billion. Utilised foreign
direct investment (“FDI”) in Beijing reached USD 9.0 billion in 2014,
an increase of 6.1 percent over the previous year. Meanwhile,
contracted FDI rose to USD 35.7 billion due to the increasing equity
mergers and acquisitions of enterprises by foreign investors.
2,500
1,500
2,000
1,000
500
0
2008
2010
2012
2009
2011
2013
2014
18%
6%
10%
12%
14%
16%
4%
8%
2%
0%
RMB Billion
768
269
1,033
332
1,212
374
1,359
1,499
435
1,663
455
900
274
11
9.0% 13.1% 16.1% 16.1% 11.3% 9.5% 9.4%
14
15
16
16
12
12
Tertiary industry
Secondary industry
Primary industry
Growth Rate
406
700
500
300
100
600
400
200
0
2008
2010
2012
2009
2011
2013
2014
RMB Billion
385
486
522
591
646
703
756
191
234
290
304
315
348
391
Fixed Asset Investment
Real Estate Investment
ASCENDAS REAL ESTATE INVESTMENT TRUST ANNUAL REPORT 2014/15
