Shenzhen
Shenzhen is a major city in the southern part of Guangdong Province. It is located along the eastern shore of the Pearl River Delta and acts as a link to Hong Kong in the south. Since Shenzhen was designated its status as a Special Economic Zone (SEZ) in 1979, the first of its kind in China, it has rapidly transformed from a small market town into a metropolitan area with over ten million people. On the back of a manufacturing boom Shenzhen had one of the fastest-growing populations during the 1990s to 2000s and allied with the establishment of the SEZ quickly became one of China’s wealthiest cities and a financial center of Southern China. The city holds sub-provincial administrative status, which is less than the provincial powers held by cities such as Shanghai and Beijing. However, it still has administrative jurisdiction over eight districts, including: Futian, Luohu, and Nanshan districts. By being on the border of Hong Kong and China, Shenzhen plays an important role in transporting people across the two regions. The Shenzhen Bao’an International Airport is one of three airports that serves the urbanized region of the Pearl River Delta and was the first airport in China to integrate a multimodal transport system that includes a ferry service, rail/metro lines and aviation routes. It also provides a border transit service for those looking to travel to-and-from Hong Kong. Currently the Shenzhen Metro system, which opened in 2004, has 8 lines - 3 of which opened in 2016 – in operation. References: JLL Shenzhen Property Market Review 2016 and Vision 2017
Futian
Luohu
Nanshan
Shenzhen possesses a number of commercial property projects, such as Pingan IFC, Taiping Finance Building, SCC Finance Center Tower, Ali Center, Avic Center, Kerry Plaza Tower, NEO-A, Kingkey100, and China Resources Building. The future developments in Shenzhen are currently concentrated in the Futian CBD and Nanshan district. More than 1.3mn sqm Grade A office supply has been seen in 2016, and around 80% of new projects are located in Futian district. HQ buildings completed this year have had a higher self-use demand than expectation. Due to the growing need for leasing, the net absorption in 2016 has reached a record high. However, the large supply of new space has brought pressure to the rental market. The vacancy rate has increased to 12%, rising about 3% y-o-y. Based on the analysis of leasing transactions in 2016, it is clear that high-tech and financial firms dominated the leasing market. There was also a clear trend that demand of expansions and new setups from the financial industry was on the rise. The office market outlook is indicating that HQ buildings will be taking a bigger share of the supply pipeline with self-use supply also on the increase. Therefore, although it is predicted that at the end of 2017, the vacancy rate of Grade A office will still be on the rise, the percentage could be maintained within 20%. A large portion of the predicted office stock rise in Nanshan district will come in the form of Grade A office supply with many buildings to be completed in the coming two to three years. The annual increase of office supply will push up vacancy and will put a downward pressure on rental levels, especially in ageing buildings. References: JLL Shenzhen Property Market Review 2016 and Vision 2017