According to a recent story in the South China Morning Post, a new 60,000 square metre Qianhai office project being built by the Shenzhen-based developer is now 80 percent leased, with 30 percent of the tenants come from Hong Kong, including HSBC and Hang Seng Bank.
Companies from China’s mainland, particularly from the finance sector, are also snatching up space in the low-rise office park with Industrial and Commercial Bank of China (ICBC), China Citic Bank, and Agricultural Bank of China all having signed contracts to set up offices in the partially completed facility.
Interest in Cross-Border Financial Centre Grows
The Qianhai zone has been promoted as a “mini-Hong Kong financial hub, and interest in the zone has picked up dramatically since China’s central government indicated in January that it would be in line for the same free trade zone status as Shanghai’s free trade zone. The free trade zone projects are being used as trial areas for liberalising currency exchange and other financial reform measures.
So far, Vanke has completed five of the fifty buildings in the park, and plans to have the rest finished by the end of this year. The space is renting for RMB 250 to RMB 300 per square metre per month.
In January, US real estate developer Silverstein Properties, together with a Chinese partner paid a record RMB 13.4 billion (US$2.21 billion) for a site in Qianhai.
Earlier this year, there were rumours that Vanke was planning a joint venture private bank based in Qianhai together with Chinese Internet giant Tencent. However, the story has yet to be substantiated.
Commercial Project Good News for Housing King
The news out of Qianhai is particularly welcome for Vanke, which is attempting to diversify away from its traditional base of building mid-market homes in China. Today the company, which is China’s largest developer by sales, announced that its first-quarter profit dropped 5 percent as revenue slumped due to low sales volumes.
Net income was also down, sliding to RMB 1.53 billion (US$245 million) compared to 1.61 billion for the same period in 2013, according to a statement filed with the Shenzhen stock exchange. Revenues were down 32 percent for the quarter, compared to the first three months of last year.
In recent months Vanke has announced a new luxury housing project in Manhattan, the acquisition of a residential site in Hong Kong, investments in the hospital industry and plans for a logistics real estate fund with Blackstone, as it attempts to branch out into new areas in search of profits.