According to a white paper, industries including integrated circuits, life sciences, artificial intelligence, new energy vehicles and gaming have become driving forces of Shanghai’s industrial park leasing demand. — China Daily
SHANGHAI: As Shanghai builds itself into an innovation centre with global influence, industrial parks are seeing more opportunities as an important sector to attract and hold industrial corporations, a report says.
“Shanghai’s industrial park market has played a major role in promoting the city’s innovative development as it gathers together many high-quality industries,” said Yao Yao, head of research for JLL China.
“The structural transformation of economic development is driving high-tech industries to grow more rapidly, which increases the importance of industrial parks in attracting high-tech and scientific innovation businesses to settle.”
A white paper was released yesterday by global real estate advisor JLL in a bid to understand the needs of industrial park tenants, study the sector’s short-term supply pressures and long-term industrial development, and discuss the trends and opportunities of the industrial park market in the future.
The white paper is based on an analysis that surveyed more than 3,600 enterprises in up to 200 industrial parks, over 100 corporate tenants and more than 60 investment institutions.
According to the white paper, industries including integrated circuits, life sciences, artificial intelligence, new energy vehicles and gaming have become driving forces of Shanghai’s industrial park leasing demand.
In the past two years, the five major industries contributed up to 70% of the city’s industrial parks’ new leasing demand, supporting Shanghai’s rank as tops in the nation in these sectors, said Ding Ting, research director with JLL East China.
Among them, the sales revenue of Shanghai’s integrated circuit industry surpassed 300 billion yuan in 2022, accounting for more than 25% of the nation’s total.
The sector’s wide application scenarios ranging from automotive electronics and artificial intelligence to consumer electronics, medical equipment and more, are huge opportunities for integrated circuit enterprises to grow, Ding said.
Likewise, Shanghai is one of the nation’s most influential hubs for the life sciences industry by possessing the greatest number of listed companies and foreign-funded research and development headquarters among all Chinese cities.
The industrial scale of Shanghai’s life sciences sector reached 853.7 billion yuan in 2022 and is projected to exceed one trillion yuan by 2025.
Regarding the city’s high-quality industrial foundation, abundant scientific research talent and research and development platforms, as well as its leading clinical hospital resources and convenient financing channels, Shanghai has formed a sophisticated ecosystem of life sciences, and its abundant market demand will continue to drive the sector’s stable development in the future, Ding said.
According to Ding, along with technological advancements, the boundaries between different industries are blurring and there is increasing integration and intersections between industries.
The survey results showed that up to 36% of the enterprises in Shanghai’s industrial parks span two or more industries, indicating a growing trend of cross-industry development, Ding added.
Research also uncovered tenants’ rising concerns for cost reductions and efficiency improvement on the backdrop of economic restructuring and transformation.
Yu Zeren, head of business park services for the JLL Shanghai office leasing advisory, said 89% of tenants believe there is room for improvement in property conditions and asset management services of the industrial parks where they are located.
Among them, 71% hope the property quality and facilities will be upgraded, while 43% expect further enhancement in asset management services.
Despite short-term pressure, investors remain optimistic about investing in Shanghai’s industrial parks as more than 70% of investment institutions have made their deployment into the market, with 89% of investors expected to make additional investments or consider acquiring industrial park properties in the next three years, the survey said. — China Daily/ANN
