Worth Waiting For: The Greater Bay Area Megacity Blueprint
● A fresh round of business incentives for corporations as the Greater Bay Area master plan provides clarity
● One-hour living circle to encourage the flow of people and capital, fundamental to the next phase of growth in the Greater Bay Area real estate sector, says CBRE’s Tom Gaffney
Brought to you by: CBRE
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The long-awaited blueprint of the Greater Bay Area is here. The ramifications are sizable. And the opportunities for business and individuals alike are unmistakable.
The Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area – the master plan’s official title – is governed by a straight-forward concept – collective growth. Its ambition to transform the Greater Bay Area into a world-class bay area economy by 2035 through infrastructure development sits at its core. And its success will hinge on economically-critical sectors, including the real estate sector, with its issuance delivering on its promising prospects.
The blueprint, which sets forth the strategic directions for 11 cities in Southern China, can serve as a guideline for investors, developers and corporate tenants who are looking to make a foray or planning to expand their businesses in the Greater Bay Area, CBRE said.
The commercial real estate services and investments firm predicted last year that the Greater Bay Area will rise as “the world’s largest bay area economy”. Tom Gaffney, regional managing director, CBRE Greater Bay Area and Hong Kong, shared this view at the SCMP China Conference, setting out clear advantages that will aid China’s Greater Bay Area in its ambitions of becoming one of the largest bay economies globally.
“The Greater Bay Area has many functional advantages already in place. It has two world-class financial hubs (Hong Kong and Shenzhen), as well as internationally-acclaimed airports and seaports. The launch of large-scale infrastructure projects that bring to life the ‘one-hour living circle’ that expedites the flow of talents, capital and goods will only add to its collective and existing strength.”
This new development has clear and present implications for the property sector. “After all, property is all about location, and the location is all about connectivity. Given this reality, the Greater Bay Area initiative brings along an exciting chapter of growth to the real estate market,” Gaffney added.
For Hong Kong, the shortage of land and ongoing cycles of high prices for commercial and residential properties, has damaged affordability and posed a considerable bottleneck to the city’s future economic development. With the backdrop, the new Greater Bay Area policy initiative comes at an opportune time for Hong Kong as it looks for incubators for its next phase of growth.
“Think about the property market in Hong Kong – CBD office vacancy rates stand at 1%, industrial building vacancy at 2% and residential at 3-4%. These are incredibly low levels by any city’s standard. Then consider the fact that Hong Kong is ahead of many cities in its financial and legal systems, but will run into roadblocks if we do not act fast enough to enhance our competitiveness. This is one very plausible, long-term solution,” Gaffney said.
Last year the Hong Kong-Zhuhai-Macao Bridge unveiled the world’s longest sea crossing bridge. It is a centrepiece for China to develop the Greater Bay Area and redress the long-standing development imbalance between the east and west coasts of the Pearl River Delta. It will also help boost economic development on the west side of the Greater Bay Area.
More recently, increasing numbers of multinationals have started to establish business divisions in the Greater Bay Area to leverage on the commercial opportunities brought along by its connectivity. CBRE is one of the international companies that has established the Greater Bay Area as a new business geography before the blueprint was released. Gaffney said this trend will grow stronger, with the blueprint setting the direction.
“Clarity provided by the blueprint underpins the development of all property sub-markets. The one-hour connectivity, enabled by the bridge or the high-speed rail, creates a great appeal for international and domestic corporations to set foot and expand their businesses in the Greater Bay Area. The industrial and logistics sectors are also set to receive a direct advantage from the launch of other large-scale bridges and highway projects. We will see more developments coming to these sectors in the years to come.”
Tom Gaffney is regional managing director of CBRE Greater Bay Area & Hong Kong and was a speaker at SCMP’s China Conference on February 21.