Shanghai Business Park 1H/2019

Shanghai has supported a business park market for 30 years, since the first park, Caohejing, was established as a state-level economic and technological development zone in 1988. The majority of projects developed in Caohejing’s first phase were for industrial-related use, and when Jinqiao business park was set up in 1990 and Zhangjiang in 1992, they also focused on industrial properties.

While initially intended for industrial use, business parks started to convert their existing premises and build traditional office buildings in the early 2000s. This move coincided with limited supply and low vacancy rates in the city core Grade A office market (2003-2008), which pushed up rents to a high of RMB8.7 per sq m per day by Q1/2008. At that time, just prior to the GFC, rents in the high zones of better projects reached as high as RMB18 per sq m per day. Limited availability and higher overheads in the core markets forced companies to consider alternative, more affordable locations, whilst infrastructure and amenity improvements, a suburbanising population and lower rents made business parks more attractive.

Rising core rents vs. lower cost business parks: The city’s core Grade A office rents stood at RMB9.0 per sq m per day by the end of 2018, whilst business parks were close to half that price at RMB4.8 per sq m per day. Companies seeking to reduce overheads have been tempted to relocate their premises to areas with more affordable rates.