First mover China Vanke is likely to be one of the early winners in Shenzhen's Qianhai special economic zone.
Enterprise Dream Park, which the country's largest developer is creating in the zone under the build-operate-transfer (BOT) investment model, stands to generate quick income while entailing lower levels of capital commitment and risk.
While other developers' multibillion-yuan projects have not yet got off the ground in Qianhai, Shenzhen-based Vanke has been signing leasing agreements with big banks and financial institutions for office space in the park.
In contrast to other developers, which have made heavy investments in land in Qianhai, Vanke is using the low-risk BOT format for the zone's first commercial project.
Vanke is responsible only for the construction cost. The Qianhai Authority supplied the 90,000-square-metre site near the entrance of the zone.
Enterprise Dream Park, comprising 50 office blocks, each two or three storeys high, will yield a total gross floor area of 60,000 square metres.
He Lan, investment director at Shenzhen Vanke Dream Park Operation Management, estimated the construction cost at one billion yuan (HK$1.26 billion). She said Vanke would receive the rents. The firm would manage the project in the first six months before turning it over to the authority.
Office rents at the project are 250 yuan to 300 yuan per square metre per month, and nearly 80 per cent of the total area has been leased, He said.
On a rough calculation, Vanke could fetch an estimated 180 million yuan in annual rental income if all the space is leased at 250 yuan per square metre per month. The developer would recoup its one-billion-yuan investment in about six years. Only companies registered in Qianhai can set up operations in the zone. Nearly 6,000 firms have registered so far.
Because Enterprise Dream Park is the first commercial project in Qianhai, companies keen to set up a presence in the zone will have to lease space at the project.
Vanke says it has signed up a first batch of 15 companies, including HSBC and Hang Seng Bank, Industrial and Commercial Bank of China, China Citic Bank, Agricultural Bank of China and China Mobile.
Other developers, however, may encounter a flood of new office supply when their projects are due for prelease later this year, because most of them bought land more or less at the same time.
Last year, Qianhai auctioned off six parcels of land totalling 2.55 million square metres for 40.7 billion yuan.