In recent years, Chengdu in southwestern China has seen a remarkable construction boom of office buildings on industrial land plots. As of mid-2023, the city achieved a high-level stock of 11.9 million sqm from industrial office and 11.4 million sqm from commercial offices. In addition to the commercial offices of both Grade A and Grade B standards, total stock of office-use space in the city has reached 23.3 million sqm, a scale already outstripping the Grade A office stock of Shanghai.
Figure 1: Chengdu Office Industry Breakdown
Source: JLL Research, as at 2Q23
The Technology, Media and Telecom (TMT) sectors continue to dominate, accounting for 29.6% of total office demand, establishing as leading industries in Chengdu. Narrowing the scope to industrial offices, the demand from TMTs has reached an impressive market share of 42%, reinforcing the city’s reputation as a regional technology and innovation centre among China’s inland provinces.
Concurrently, the supply of commercial real estate in Chengdu maintains a strong momentum, and the city rank fifth in Grade A office stock nationwide and third in prime retail property stock. The robust infrastructure and real estate industries contribute to a market share of 16.5%, making it the second largest occupier following TMTs.
Grade A offices have also been established as a preferred location by financial and business service companies, underpinned by their strong affordability for high-profile premises. As a market practice, the clustering of finance and business service can be used as a benchmark to assess the maturity degree of a business centre. Amid the wave of economic uncertainty, the service sectors serve as a pillar of office demand. As per JLL data, finance and business services account for 12.7% and 8.5% of the total demand, respectively, ranking in third and fourth places.
The reputation of Sichuan University and its affiliated hospitals in West China is well known across China. The growth of biopharmaceutical Research and Development (R&D) in Chengdu has attracted a wide spectrum of pharmaceutical companies, engendering a share of 5.3% for life sciences and pharmaceutical industries.
Both commercial office or industrial office spaces are essential for the future economic growth of this city. The over 20 million sqm of workspace underpin the city’s strength as a base for growth industries such as TMT and the live sciences sectors.
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