China’s tech industry has been growing at double-digit rates for many years now, and the expansion of the country’s technology giants has started to have an impact on the office real estate market.
Examining the effect of the industry on Beijing’s Zhongguancun, a centre for high-tech firms, the Wall Street Journal finds that,
The landscape of Beijing’s northwestern Zhongguancun district, the center for the decadelong boom in Chinese Internet companies, still is dotted with many of those malls alongside fast-food restaurants and a mix of old and new office buildings.
But rents there are rising and vacancies are below Beijing’s city average. The result, real-estate consultants say, is that flush Chinese companies looking to build new headquarters are moving increasingly far afield, north and south of the core Zhongguancun area.
And apparently the trend is not limited to Beijing,
The same phenomenon is beginning to take place in other cities in China, where new tech districts are sprouting up around universities, pushing up rents as developers and tech companies spend on stylish new homes.
In the southern city of Shenzhen, social-media and gaming giant Tencent Holdings Ltd. TCEHY +0.33% is building a new 270,000 square-meter (886,000 square-foot) office space. With two towers connected by two large skybridges, the office is designed to be a “vertical campus,” according to NBBJ, the architecture firm that designed the complex.
In general, Beijing office rents have risen more quickly than other areas in the country, and Zhongguancun is no exception, with rates for prime space jumping an estimated 44 percent to RMB 241 yuan per square meter per month over the last five years.