Recently my colleague, Warner Brown, wrote an article for the e-magazine Tea Leaf Nation which included an amusing map showing stereotypes of the different provinces and municipalities of China. The map he created contains an example of one of the myths continually perpetuated about Tianjin, namely that it is not a top-tier city. Another myth is Tianjin’s office and retail markets are oversupplied.
Source: JLL, Municipal Statistics Bureaus
Taking the myth that Tianjin is not a top-tier city first – some people think it is a backwater. But nothing could be further from the truth. Tianjin has experienced phenomenal economic growth over the past decade, largely the result of having one of the most advanced manufacturing sectors China. The strong aerospace and electronics clusters and expanding service sector are on pace to become the largest contributors to Tianjin’s GDP. The city has transformed into the fifth largest economy in China and in our report, “China50: Fifty Real Estate Markets that Matter”, Tianjin had the highest economic score and was named a Tier 1.5 city. Tianjin’s economic success is expected to continue unabated and Oxford Economics predicts that the city’s GDP will eclipse that of the Tier I cities Shenzhen and Guangzhou by end-2014 and end-2016, respectively. Tianjin is no longer the Podunk town of the past.
Source: JLL, Oxford Economics
The second myth I have been hearing is that “Tianjin’s office and retail markets are oversupplied and the situation is almost as bad as in Shenyang”. I attribute this primarily to the media and investors conflating the still under construction Yujiapu Financial District (YFD) with the whole of Tianjin. The reality, however, is a bit different. The YFD:
- Is far from central Tianjin – 50 km away
- Will be built in several phases over many years
- Will not be a viable alternative location for many businesses currently in Tianjin’s CBD
Tianjin has one of the largest numbers of service sector employees of any city in China, only marginally behind that of Shenzhen or Guangzhou. However, central Tianjin’s Grade A office stock is only a tenth of Shenzhen’s or Guangzhou’s. In addition, the wholly-owned Grade A buildings in central Tianjin enjoy occupancy rates well above 95%, leaving MNCs within the city with few options for expansion and suggesting a need for more quality office towers.
From a retail perspective, Tianjin has the sixth largest retail sales and the fifth largest population in China. However, there are still many well-known brand-name retailers who have yet to open in the city. There are still densely populated areas of the city where residents have high incomes but little access to convenient, quality shopping. If anything, there are large pockets of Tianjin that are under-retailed.
It is unfair to call the whole city of Tianjin oversupplied based on a remote section of the city that has not even been built. Like the map, these myths are amusing, but do not tell the complete story of the great city of Tianjin.
More on 'Office' in 'China'
- The increasing adoption of robotics in China’s real estateNovember 12, 2024
- Beijing office tenant survey: resilience amid volatilitySeptember 17, 2024
- The growing popularity of games in GuangzhouAugust 23, 2024
- The impact of AI on China’s proptech landscapeJuly 24, 2024
- New CBDs are emerging in the Greater Bay AreaJune 14, 2024
