The rise of China’s PropTech market

March 13, 2024 / By  

After years of development, China has emerged as one of the world’s most important PropTech hubs.

The JLL China PropTech Database reveals the remarkable surge in capital investment in China’s PropTech companies, with over 1,860 investment events recorded since 2013, amounting to more than USD 58.5 billion. This influx of funding has been accompanied by an impressive compound annual growth rate of 62%. Notably, the majority of PropTech companies in China are clustered in three key urban agglomerations: the Yangtze River Delta, the Greater Bay Area, and the Beijing-Tianjin-Hebei region. Having well-established real estate markets and technologically advanced cities like Beijing, Shanghai, and Shenzhen, these regions have become hotbeds for innovation and investment.

Figure 1: Growth of China’s PropTech investment in the past ten years

Source: JLL China PropTech Database & Jingdata, 4Q23

Meanwhile, businesses in China are increasingly recognising the importance of technology innovation in shaping corporate real estate strategies. The 2023 JLL Global Real Estate Technology Survey reveals that 92% of corporate occupiers and 87% of investors and developers in China plan to increase their investments in real estate technology budgets over the next three years. The value of PropTech as a crucial component for maintaining competitiveness and driving sustainability has gained recognition among a growing number of companies.

Figure 2: Technology budget plan over the next three years

Source: JLL Global Real Estate Technology Survey (China part), 2023

ESG (Environmental, Social, and Governance) factors have become a key investment driver for most companies, and the real estate industry is no exception. The commitment to ESG has fuelled a rise in sustainability-focused PropTech investment in China. Sustainability innovations are most prevalent in the design and construction sectors, as well as in property and facility management – the two largest contributors of carbon emissions throughout the building life cycle. In addition, integrated energy services, carbon asset management, and risk warning technologies are being leveraged to drive sustainability and mitigate environmental risks in China’s real estate industry.

Figure 3: Areas of technology budget increases in the next three years

Source: JLL Global Real Estate Technology Survey (China part), 2023

Cost efficiency and user satisfaction are top metrics for technology implementation. In a competitive market with rising operational costs, Chinese companies prioritise technology solutions that offer cost control, efficiency improvement and customer retention. According to the survey, 80% of Chinese companies consider their deployed tech programmes successful in meeting most of their objectives. However, only 20% of respondents deem their tech solutions very successful, and their percentage is significantly lower than the global average of 35%. As the market continues to evolve, there is immense potential for the development of mature and tailored PropTech solutions to meet the specific needs of China’s real estate industry.

For more details, please download “Navigate New Horizons: 2023 China PropTech Whitepaper”.

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