Qianhai has a lot of yet-to-be leased office space on the market, with vacancy rates at historic highs for a district in Shenzhen. Never mind, says international real estate consultancy Colliers, it will catch up fast and likely overtake the neighboring Houhai district.
Thanks to policy support for the special economic zone, which is attracting a surge of investment, Colliers believes Qianhai will benefit from near-term and longer-term trends in the coming years. (Read our primer on Qianhai to understand more.) Subsidies are currently generous, making rents here less than 70% of what they are in other districts, while infrastructure is being put in place that will soon make the district easier to access from the rest of the city.
Chief of these infrastructure–upgrade projects are the subways. The southern extension of Metro Line 5 and the western extension of Metro Line 9 will open at the end of the year. Soon afterward, expressways will come online connecting Qianhai to central Nanshan, home of many of the city’s leading tech companies.
The government is being clever with its subsidies. The latest policy, released in June, incentivizes prospective tenants to make decisions sooner rather than later, with timed step-ups in rental offers. Moreover, the government is looking for major tenants, not allowing co-working spaces to mushroom.
They have their work cut out for them. From now until 2023, Qianhai will bring onto the market approximately 1.9 million sqm of office space, accounting for 44% of the city’s new supply during the period.
There is a good base case to work from, however. In 2014, Houhai, full of hi-tech companies, was well behind the Futian financial district, with rental rates at about half. By the first half of this year, Houhai was only 8% lower than Futian. Colliers believes that Qianhai is currently experiencing the same situation.
As of July, 203 tenants have settled into the three Grade A office buildings that are fully operational. Most are from the finance, technology and logistics sectors.