Swire Properties has a bold vision that anticipates the continuing rise of Shenzhen
The Southern Chinese city of Shenzhen, which overtook Hong Kong in economic size last year, now ranks as the prime location for future development, according to Swire Properties chief executive Guy Bradley
Swire Properties, the developer of grade A office and retail complexes such as Pacific Place and Taikoo Place, is aggressively looking to gain a foothold in Shenzhen through partnership or site acquisitions in anticipation that the city’s status will benefit as the Greater Bay Area (GBA) takes shape.
Analysts said the planned move by Swire will set a new benchmark for the commercial property market in Shenzhen, as the city transforms itself into an international financial and tech hub.
“We have a strong focus on tier one cities. We have two projects in Shanghai, two in Beijing, we have projects in Guangzhou and Chengdu. So the missing part of that is in Shenzhen,” said Swire Properties chief executive Guy Bradley.
“We have not got any assets in that important city [Shenzhen] of China. We would like to find some suitable projects, we have been looking aggressively,” Bradley told the Post in an interview.
Shenzhen, which is roughly the same economic size as Singapore and Hong Kong, recorded nominal output of 2.2 trillion yuan (US$338 billion) in 2017 thanks to its booming hi-tech sector. Its GDP has surpassed Guangzhou, making it the largest of the nine mainland cities in the GBA.
Swire made its first big move into the mainland with the signing of a memorandum of understanding for developing a multi-use complex in Tianhe District, encompassing retail, office, hotel and serviced apartments. But it took the company a decade to complete the 358,000 square metre project Taikoo Hui, which officially opened in September 2011.
Since then, the company, controlled by the Swire family of Britain and listed on the Hong Kong stock exchange, has successfully completed or acquired stakes in ongoing projects in a handful of high-end developments across China.
These include Taikoo Li Sanlitun and Indigo in Beijing, Taikoo Hui in Guangzhou, Sino-Ocean Taikoo Li Chengdu in the provincial capital of Sichuan, and the Qiantian development in Pudong and Taikoo Hui in Puxi, both in Shanghai.
Bradley said all of its projects. including the Guangzhou’s Taikoo Hui have attracted international retailers and multinational firms as office tenants.
“The GBA initiative is probably the next most exciting story in southern China, we want to be part of that,” said Bradley.
In addition to Hong Kong and Macau, the GBA includes Shenzhen, Guangzhou, Zhuhai, Zhaoqing, Dongguan, Huizhou, Foshan, Zhongshan and Jiangmen. The aim is to create a world-class city cluster that could overtake similar economic zones, such as the San Francisco Bay Area and Greater Tokyo.
The area represents 0.6 per cent of China’s total land mass, yet it is home to 5 per cent of the total population, and accounts for 12 per cent of the country’s GDP, according to CBRE data.
“Swire Properties can attract a lot of followers from multinational firms and international retail brands. It also invests a lot of effort into sustainable development of the buildings,” said Carlby Xie, director of Savills Southern China Research.
MixC, the 860,000 sq m development owned by China Resources, is still largely seen as one of the best mixed-use developments in Shenzhen.
Xie said Swire’s planned investment will speed up Shenzhen’s growth story and enhance its competitiveness in the long run, but it will take considerable time.
“Although Shenzhen’s status as a financial hub is growing quickly, Hong Kong remains as one of the world’s leading global financial centres. And until restrictions on capital flows and access to information on the mainland are lifted, it will be hard for Shenzhen to seriously challenge Hong Kong,” said Denis Ma, head of research at JLL Hong Kong.