Hot spots
The property firm has grouped these cities into three market types, each group offering different opportunities and characteristics for occupiers, developers and investors.
The first type is prime markets, including Beijing and Shanghai. The two municipalities account for more than a third of China's current business park stock and are host to China's most high-profile parks.
Robust occupier demand in these cities is being supported by the rapid expansion of R&D activities, growth in back-offices and the decentralization of business activities from CBDs.
Shanghai and Beijing are China's most transparent markets and are currently favored by established players and new market entrants such as Goodman, CapitaLand, Shui On and Frasers Property.
The second type is transitional markets, for example, Dalian, Chengdu and Hangzhou. They are gradually catching up with the prime markets in terms of the quality of business parks projects.
They are developing their niche markets to differentiate from the prime markets, particularly in BPO activities. They are targets for a number of international and domestic developers including Ascendas and Software Park China, whose participation will help to improve quality and transparency.
The third type is the first-mover-advantage market such as Tianjin, Jinan and Chongqing. Those cities so far have lower levels of business park activity but their local governments have aggressive expansion plans and in order to attract high-quality tenants and experienced developers, they are offering generous incentives for new entrants.
These cities provide "first-mover advantages," with lower land costs and less competitive real estate environments.
"We believe Tianjin offers the best potential to develop as a robust business park market due to strong government support and the presence of multinational companies," said Loo.
