Qianhai economic zone’s expansion to benefit state-owned developers with massive land banks

An influx of talent from Hong Kong and Macau will lead to rising demand for homes in Qianhai economic zone

State-owned China Merchants Group, Grand Joy and Shenzhen Metro Group sit on massive land reserves in the main districts of Nanshan and Bao’an

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The Qianhai free-trade zone is being expanded as part of a push to further integrate the Hong Kong and Macau economies in the Greater Bay Area along with nine cities in Guangdong province. Photo: VCG via Getty Images

Published: 8:30am, 10 Sep 2021Updated: 10:05pm, 10 Sep 2021

State-owned developers with massive land banks in Qianhai stand to benefit the most from an expansion of the economic zone, as demand for houses is likely to increase on the back of a steady influx of talent.

The zone, which was originally created in 2009 to foster cooperation between Shenzhen and Hong Kong, will increase in size from 14.9 sq km to 120.6 sq km to entice more businesses to open operations in the area, according to a blueprint unveiled by the State Council, China’s cabinet, on Monday.

“The Qianhai zone must deepen its service trade liberalisation with Hong Kong and Macau, expand the opening up of its financial industry and legal services, as well as participate in international collaboration,” according to the plan, whose vision is to make it “world class” by 2035.

The zone will see a rush of people who will come to settle down in the area, particularly talent from Hong Kong and Macau, thus increasing demand for houses, said Yan Yuejin, director of Shanghai-based E-house China Research and Development Institute.

Senior Beijing officials join representatives from the Greater Bay Area for a press conference on Thursday to announce the central government’s latest plan to expand the Qianhai economic zone. Photo: RTHK

“Those developers who already have a footprint in the area will enjoy an early-mover advantage,” she said.

China Merchants Group, under the direct supervision of the state-owned Assets Supervision and Administration Commission of the State Council, has the largest land bank in the Qianhai economic zone. The Hong Kong-listed conglomerate owns some 1.48 million sq m in Nanshan district, according to figures from Real Estate Foresight, a market research firm.