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DTZ China Insight

Beijing : tension between expansion and cost concerns

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A research produced by DTZ

Nowhere in China is the current boom in the national Technology Media Telecommunication (TMT) sector more evident than in Beijing, where of the 18,000 companies employing 1.645 million people in the city’s Zhongguancun “Silicon Valley”, fully 57% are are engaged in a TMT related industry.

As a result of the recent ramp up of employment by TMT companies in Beijing, the sector emerged as the largest single demand driver for office space, accounting for nearly 30%, or around 74,900 sq m, of net absorption recorded in 2013.

A DTZ TMT office occupier survey undertaken in Beijing in March demonstrated that companies in the sector do indeed plan to continue to expand rapidly. At the same time, these companies remain acutely cost conscious and so continue to struggle with the conundrum of how to continue to grow operations in China’s most costly office leasing market.

The survey revealed an overall trend for larger, national level TMT corporations to move their most labour intensive operations to hi-tech hubs or business parks away from the most costly CBD.

Additional research undertaken by DTZ indicated that in these decentralized locations, medium sized companies are more inclined to lease office facilities. However, the new generation of TMT giants are increasingly keen to acquire office buildings en bloc or acquire sites to develop into their own corporate compounds.

Regardless of whether these TMT companies develop space in suburban business parks or lease premises in the existing downtown business districts, they are generally only willing to commit to occupy space in singly owned buildings which can accommodate their advanced technical needs.

Source : DTZ (Groupe UGL)

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Keywords : DTZ

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