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1、ResearchChina|October 2023 Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookIntroductionLong Chinas largest city and commercial capital,Shanghai now has set a strategic goal to leverage urban planning and development tools to establish itself as a global technology a
2、nd innovation hub.This effort not only will play a crucial role in driving Shanghais own high-quality development,but also will help China achieve its broader mission of becoming a world leader in technology.Shanghais business parks since inception have been essential vessels of the citys industrial
3、 growth,nurturing many of the nations industry-leading firms.The business park sector will remain vital as the citys economy undergoes innovation-driven transformation,benefitting from ongoing industrial clustering effects and growing policy support.This report focuses on Shanghais business park pro
4、perty market and explores the clustering effects and leasing demand of five major industries,taking into account the distinct industrial value chain characteristics of each.We also consider each industrys potential for increased business park demand in Shanghai over the medium to long term.Industry
5、crossover and collaboration are likely to generate additional leasing demand.JLL(Jones Lang LaSalle)has surveyed over 100 tenants to understand how business park requirements are evolving.Starting from dimensions like property specifications and asset management operations,we propose an industrial p
6、erspective for business park properties that is suited to the long-term development needs of industries.We have conducted further surveys of over 60 institutional investors;here we explore trends and opportunities in business park capital markets,in particular considering the combined effects of sho
7、rt-term supply pressures and the long-term industrial development outlook.2Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookContents01Five major industries drive leasing,while industry crossover and collaboration generate new demand 4Five major industries support sta
8、ble business park demand 4Opportunities from industry crossover and collaboration 1502Meeting tenants industry-specific needs 19Expanding consideration of site selection factors and greater industry-oriented approaches 19Two approaches to cater to tenants unique needs:property condition and asset ma
9、nagement services 2303Investment models diversify,enriched by industry focus 32Industry-specific approaches enhance business park investment 32Investment strategies influenced by both policy support and short-term supply pressure 34Industrial perspective stimulates long term investment opportunities
10、 and diverse investment strategies 403Embracing Changes,Forging New Paths:Shanghai Business Park Property Market Outlook25%Life Sciences7%AI14%NEVs16%Integrated Circuits31%Others7%Gaming25%Life Sciences7%AI14%NEVs16%Integrated Circuits31%Others7%GamingLeased GFA in Shanghai Core Business Parks01Five
11、 major industries support stable business park demandFive major industries drive leasing,while industry crossover and collaboration generate new demandAs Shanghai builds itself into a global science and technology innovation center,business parks are becoming platforms for innovation in many industr
12、ies.The citys economic transformation is driving rapid growth of high-tech industries,boosting industrial agglomeration effects.This trend helps to strengthen the science and technology atmosphere in many business parks,attracting still more advanced science firms and institutions from strategic eme
13、rging industries to establish presences there.Over the past two years,five major industries have driven leasing in business parks:integrated circuits,life sciences,artificial intelligence,new energy vehicles(NEVs),and gaming.The first three count among Shanghais leading industries and are beneficiar
14、ies of policy support;firms in these sectors have long shown leasing demand while strategically transforming and innovating.They are the pillar industries of Shanghais business parks and are national leaders in growth momentum.Meanwhile,new energy vehicles with their extensive supply chains are also
15、 emerging as a key demand driver for Shanghais business parks.Finally,business park demand is growing from firms in the gaming sector,benefiting from its huge pool of end-users and potential to integrate with other Source:JLLFigure 1.Leased GFA in Shanghai Core Business Parks,2H21-1H23industries.JLL
16、 research shows that these five industries have accounted for nearly 70%of the past two years new leasing demand in Shanghais business parks.4Figure 3.Integrated Circuit Industrial Value ChainConsumer electronicsCloud computingMedical devicesAutomotive electronicsRoboticsArtificial IntelligencePhoto
17、voltaic intelligenceIoTIntegrated CircuitsIndustrial Value ChainIC DesignPhotoresistSilicon waferLithography machinesEtching machinesFilm deposition equipmentPackage substratesPhotomasksIntegrated device manufactureWafer foundryAdvanced packagingTraditional packagingMemory chipsAnalog ICLogic device
18、s UpstreamSupportDownstreamApplicationsEDA toolsDesign servicesIPMidstream ManufacturingRaw materials&manufacturing equipmentPackaging material&equipmentWafer fabricationProbes&packagingIC Testers or ATEProbe stationsSorting machinesEmbracing Changes,Forging New Paths:Shanghai Business Park Property
19、 Market OutlookYears of cultivating,Chinas integrated circuit industry have made China the worlds largest semiconductor market.Shanghai was one of the first regions in the country to begin developing this sector,and the citys strong foundation has given it a leading role in upgrading and developing
20、integrated circuits.Shanghais circuit industry sales exceeded RMB 300 billion in 2022,the highest in China and representing more than 25%of the national total.Shanghais integrated circuit industry benefits from its closely linked supply chain.Upstream companies include electronic design automation(E
21、DA)tools,manufacturing equipment,and the production of raw materials that make up the industrys foundation.In the midstream are firms doing integrated circuit(IC)design,manufacturing,packaging,and testing,which make up the majority of the sectors supply chain.Finally,downstream are a vast range of c
22、ompanies that make use of integrated circuits,including Source:China Semiconductor Industry Association,Zhongshang Industry Research Institution,JLLFigure 2.Integrated Circuit Industry Total Sales,China and Shanghai1.Integrated CircuitsRepresenting more than 25%of national total sales,Shanghai circu
23、it industry sales rank the highest in China.Billion RMBChinaShanghai04008001,2001,60020020202120222023Note:This graphic depicts major segments of the industrial value chainSource:JLLthose in automotive parts,artificial intelligence,consumer electronics,medical equipment,photovoltaics,and
24、more.While the overall investment market has cooled somewhat recently,integrated circuits remain favored by private equity players owing to their status as a strategic industry and national priority.Investors particularly favor companies in packaging materials and probing equipment,as well as firms
25、working on analog IC and logic devices.In addition,chip demand from automotive and artificial intelligence firms is rapidly growing,creating further opportunities for domestic IC companies.5Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookIC DesignMicroprocessorMemor
26、y ChipsLogic Device Analog ICDesign Tools(EDA)Integrated device manufactureRaw Materials&EquipmentWafer FoundryIC PackagingIC TestingPackaging Materials(Packaging Substrates)OthersFigure 5.Distribution of Integrated Circuit Tenants in Shanghai Business ParksIntegrated circuit companies tend to choos
27、e locations where they can cluster together with peers,so that they can expand and strengthen their collaboration with other companies in the industrial value chain.Shanghais Zhangjiang,Caohejing,and Jinqiao business park submarkets are home to some of the industrys leading companies and are acknowl
28、edged throughout China as leaders in integrated circuits.JLL Figure 4.Leading Recipients of PE/VC Funding in Integrated Circuit Industry,2022H2-2023H1Source:IT Juzi,JLLIC DesignWafer fabricationProbes&packaging7.5%research shows that integrated circuit tenants*account for 7.5%of leased area in Shang
29、hai business parks.Zhangjiang is home to the Shanghai Integrated Circuit R&D and Design Center,which aims to create a world-class integrated circuit industry cluster.In addition to projects being self-used by their owners,the area leased by integrated circuit companies in Zhangjiang accounts for nea
30、rly 15%of the submarkets total area.The Jinqiao business park has attracted spillover demand from Zhangjiang while also cultivating its own clusters of downstream companies with strong chip demand.This in turn encourages midstream and upstream chip firms to also locate in Jinqiao.Integrated circuit
31、tenants leased area accounts for 11.5%of Jinqiaos total.Submarkets that can marry an abundance of talent with policy support to foster clusters of firms up and down the integrated circuit supply chain will continue to benefit as favored sites for related companies setting up their design and R&D ope
32、rations.*only upstream and midstream companiesShare of Integrated Circuit Tenants in Shanghai Business Parks (By Leased Area)Integrated Circuit Tenant ConcentrationBusiness Park SubmarketsShanghai Ring RoadsMetro linesLowHighSource:JLL7MPUs56Analog IC14Silicon Wafers22Packaging Materials17Testing De
33、vices12Memory Chips6Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookShanghai is among Chinas top hubs in life sciences,leading the country in the number of listed life sciences firms and foreign-funded life sciences R&D centers.Shanghais life sciences industry reach
34、ed RMB 853.7 billion in market size in 2022 and is expected to exceed RMB one trillion in 2025.Abundant research talent,R&D platforms,nation-leading hospital systems and convenient access to financing have built a mature life sciences ecosystem in Shanghai,attracting many domestic and foreign compan
35、ies.We expect strong and growing demand will drive further development of Shanghais life sciences industry going forward.The life sciences industry relies on breakthroughs in innovation to sustain itself.For example,in the field of domestically developed Class I innovative drugs,Shanghai leads the n
36、ation in the number of new drug approvals.Advancements like these 2.Life SciencesFigure 6.Shanghai Life Sciences Industry Market SizeSource:Shanghai Municipal Commission of Economy and Informatization,Shanghai 14th Five-Year Plan for the Development of Biopharmaceutical Industry,JLL02004006008001,00
37、01,2002002020212022 2023F 2024F 2025FBillion RMBFigure 7.Distribution of Life Sciences Professionals and Institutions in ShanghaiResearch CenterUniversityHighLowInstitution TypeConcentration of Life Sciences ProfessionalsSource:JLLrequire a strong foundation in talent.As of 2022,there wer
38、e 278,000 professionals employed in Shanghais life sciences sector,including over 1,000 national-level experts and one-fifth of high-ranking talents such as academicians and Changjiang Scholars.This base of talent is fed by Shanghais network of well-known higher education institutions and research o
39、rganizations.Synergies among the citys life sciences firms,hospitals,and research institutes in turn support Shanghais growth as national leader in life sciences.In terms of financing,sectors with innovative technologies and high added value continue to attract capital.Demand for innovative drugs,me
40、dical devices,and other technologies remains robust.These factors support the life sciences industrys steady development and have become one of the major sources of leasing demand for Shanghais business parks.Over the past two years,leasing demand from life sciences firms in Shanghais business parks
41、 has accounted for as much as 25%of total leased GFA.In the context of the markets recent slowdown,leasing from individual sectors has been positively correlated with the amount of capital support they receive.Companies that continue to drive demand in business parks tend to be involved in technolog
42、ies like innovative drugs,genetic diagnostics,and cell therapy,among others.Figure 8.Life Sciences Investment and Financing Breakdown,1H23Instrument CRODigital TherapyRoboticsBrain ScienceTesting ServicesCell TherapyDrug DeliveryVaccinesGene TherapyAIGene EditingInnovative DrugsMedical DevicesCXOArt
43、ificial OrganReagents&consumablesMedicalEquipmentSurgical InstrumentsResearch InstrumentsOphthalmology EquipmentAntibody DrugsSmall MoleculesNucleic Acid DrugsRadio-pharmaceuticalsInstrument CDMODrug CRODrug CDMOSource:Pharmcube,Probe Capital,JLL7Embracing Changes,Forging New Paths:Shanghai Business
44、 Park Property Market OutlookFigure 9.Life Sciences Leased Area Breakdown,Shanghai Business Parks,2022-1H23Medical Instruments MedTechPharmaceutical&Novel DrugsCXODistribution&SalesMedical ServicesShanghais business parks have consistently garnered attention from both domestic and foreign life scien
45、ces firms.JLL research shows that life sciences firms constitute approximately 20%of the tenant structure in Shanghais PharmaceuticalMedical InstrumentsMedTechGenetic Test/TherapyRaw MaterialsMedical ServicesDistribution&SalesCXOShare of Life Sciences Tenants in Shanghai Business Parks (By Leased Ar
46、ea)20%Source:JLLSource:JLLbusiness parks.Among the citys business parks,Zhangjiang stands out as the top destination and leader for the life sciences industry.Zhangjiang is well-known for its concentration of top-tier talent and its dense existing life sciences cluster;life sciences firms account fo
47、r 26.1%of tenants in Zhangjiang Business Park.Other business parks such as Pujiang and Waigaoqiao also have attracted considerable attention for their well-established foundations in the life sciences industry.Shanghai has a strategic plan to develop the life sciences industry,known as the 1+5+X Bio
48、medical Industry Blueprint.As the plan takes shape,we expect that submarkets with clear,specific industry positioning and high-quality projects will receive greater demand from life sciences tenants.Notable examples include the expansion area of the Zhangjiang Core Area with its innovative drug clus
49、ter and medical device cluster.Figure 10.Distribution of Life Sciences Tenants in Shanghai Business ParksLife Sciences Tenant ConcentrationBusiness Park SubmarketsShanghai Ring RoadsMetro linesLowHigh8Embracing Changes,Forging New Paths:Shanghai Business Park Property Market Outlook3.Artificial Inte
50、lligenceFigure 11.China Core AI Industry Market SizeFigure 12.AI Equity Financing Events in Chinas Major Regions,2022Source:C,JLLChinas artificial intelligence(AI)sector has seen steady growth thanks to favorable policies in areas such as new infrastructure and the digital economy.Forecasts from iRe
51、search indicate that by 2025,Chinas AI industry will reach RMB 400 billion in size,representing a compound annual growth rate(CAGR)of 27.4%over the next three years.AI is one of Shanghais three leading industries.In 2022,AI companies headquartered in Shanghai accounted for 22%of the nations total AI
52、 financing.In the future,Shanghai will continue to leverage its market,policy,and talent advantages to further establish itself as a prominent AI industry hub.In terms of vertical integration in the AI sector,Shanghai currently holds a nationwide lead thanks to its upstream foundational layer(in fie
53、lds like computing chips,AI data,and algorithm models)as well as its downstream application layer.The city also is rapidly developing midstream technology fields like natural language processing,computer vision,and machine learning.Meanwhile,AI also is becoming more integrated with the real economy,
54、supported by software services and hardware infrastructure and extending into sectors such as transportation,manufacturing,and healthcare where it further empowers industrial development.In recent years,AI advances in autonomous driving and vehicle-to-infrastructure coordination have helped support
55、projects like smart cockpits for automobiles and smart cities.Chinas ambitions in high-end manufacturing are supported by AI-based platforms for training,inference,research and development,and operation control.In the healthcare and life sciences sectors,frontier areas such as image recognition,AI-b
56、ased pharmaceuticals,and gene analysis also rely on further advancements in AI technology.Additionally,AI has demonstrated commercial value across finance,retail,and the Internet via intelligent customer service,operational optimization,and risk investigation,all of which will continue to evolve and
57、 mature alongside the development of AI technology.0500300350400450200222023F2024F2025FBillion RMBFinancing ProportionHighLow22%Shanghai*The map only serves a schematic diagram of China.9%Jiangsu27%Beijing12%Others 12%Zhejiang 18%GuangdongSource:IT Juzi,JLL9Embracing Changes,Fo
58、rging New Paths:Shanghai Business Park Property Market OutlookFigure 13.AI Industry MapAI Infrastructure LayerAI Modeling ToolsAI Algorithm FrameworkAI Open PlatformAI Development PlatformPre-Trained Large ModelIntelligent Computing CenterSmart ServerAI Chips(Fabless)Smart Cloud ServicesAI Basic Dat
59、a ServicesData GovernanceAI Computing PowerAI Data ResourcesUpstreamAI Scenario LayerAI+FinanceMarketing&Customer ServiceCredit Risk ManagementPersonalized AssistantsAI+Pan-InternetIntelligent SearchContent ReviewAI ChatBotsAI+HealthcareDiagnostic ImagingAIDDSmart Medical Records&DRGsAI+Manufacturin
60、gCollaborative ManufacturingIntelligentSchedulingPreventive maintenanceAI+Unmanned Autonomous Systems(UAS)AutopilotDronesSmart RobotsAI+RetailVisual ProductsOperation OptimizationUnmanned StoresAI+ConstructionAECO VisualizationBuilding Hazard EWSAI Technology LayerMidstreamDownstreamNatural language
61、 processing(NLP)Intelligent AudioComputer VisionKnowledge GraphMachine LearningSource:McKinsey,iResearch,JLL10Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookJLL research shows that firms focused on the technology and Infrastructure of AI account for 3.1%of total le
62、ased area in Shanghais business parks,while companies focused on AI-enabled companies*represent nearly 6%.Among these companies,over two-thirds were firms in the transportation,manufacturing,and TMT industries,making them the sectors with the highest AI penetration rates.The strong synergies between
63、 AI companies and the industries they empower is evident in how they choose to cluster together.The Zhangjiang and Caohejing submarkets have formed relatively mature industry clusters,with active crossovers and collaborations between firms in life sciences,TMT,and AI.The presence of new energy vehic
64、le(NEV)companies in the Jinqiao submarket also is attracting AI firms in related fields such as autonomous driving.In addition,AI-related enterprises have been attracted to Lingangs high-tech TMT ecosystem as well as Shibeis cloud computing cluster.Looking ahead,the AI industry will see even greater
65、 interaction and collaboration across industries;the expansion of potential applications in various fields will drive site selection by firms working in the technology and foundations of AI,leading to more leasing in business parks.Figure 14.Distribution of AI and AI-enabled Tenants in Shanghai Busi
66、ness Parks5.9%ManufacturingAI CompaniesAI-Enabled CompaniesTMTTransportationLife SciencesConstructionFinanceProfessional ServicesOthersShare of AI and AI-related Tenants in Shanghai Business Parks(By Leased Area)3.1%Source:JLLAI and AI-enabled Tenant ConcentrationBusiness Park SubmarketsShanghai Rin
67、g RoadsMetro linesLowHigh*Note:Referring to tenants with core technology enabled by AI11Embracing Changes,Forging New Paths:Shanghai Business Park Property Market Outlook4.New Energy VehiclesFigure 15.China New Energy Vehicles(NEVs)Sales and Market PenetrationFigure 16.Chinas Top NEV Markets,Jan.-Au
68、g.2023Figure 17.Evolution of NEV Sub-sectors as Driving ForcesSource:China Passenger Car Association(CPCA),China Association of Automobile Manufacturers(CAAM),JLLSource:JLLSource:CPCA,JLLNEVs Sales Volume(LHS)Passenger NEVs Market Penatration Rate(RHS)1,0831,1092,9896,8878,5005%6%15%28%36%0%5%10%15%
69、20%25%30%35%40%45%01,0002,0003,0004,0005,0006,0007,0008,0009,000200222023FThousandsSales Volume,Jan.-Aug.2023(LHS)Market Penetration Rate,Jan.-Aug.2023(RHS)ShanghaiGuangzhouHangzhouChengduShenzhenBeijingZhengzhouChongqing0%10%20%30%40%50%60%03060900240ThousandsNew energy vehicl
70、es(also known as electric vehicles)are one of Chinas strategic emerging industries,and its rapid growth has helped to upgrade the countrys manufacturing sector and make progress on its dual carbon climate goals.Chinas new energy vehicle(NEV)industry already has reached a significant scale,with sales
71、 consistently topping the global market.In 2022,Chinas NEV sales surpassed 6.88 million units,accounting for more than half of global market share.Sales and penetration of Chinas NEV sector are expected to rise further in 2023,with total sales projected to exceed 8.5 million units and the penetratio
72、n rate NEV share of Chinas new car sales surpassing 35%,according to forecasts from the China Passenger Car Association(CPCA).National policy support and well-established NEV infrastructure have helped put Shanghai at the forefront of Chinas NEV production and sales.According to CPCA,Shanghais total
73、 NEV sales reached 207,000 units from January to August 2023,ranking first nationwide.Policy DrivenMarket DrivenIntelligenceLow carbonizationEV Subsidies Free License PlatesInfrastructure and operation subsidies Smart Cockpit Perception System(e.g.Lidar)Autonomous Driving Automotive Chips End-user S
74、ervices Intelligent Network Battery Technology Battery,Motor and Electric Control Systems Battery Charging Battery Recycling12Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookChinas NEV industry is beginning to mature after a period of rapid growth,with competition b
75、ecoming more intense and time between product iterations accelerating.The market is transitioning from policy-driven to market-driven,and many companies are shifting their research and development away from electrification to focus on intelligence.Vertically,the NEV supply chain runs long,while at t
76、he same time it is also broad,encompassing a wide range of sectors.The NEV industry can be divided into three major functional domains:“smart cockpit domain”,“autonomous driving domain”,and“vehicle control domain”.For example,the smart cockpit domain drives demand for more chips with faster computin
77、g power.The demand for sensors(such as cameras and lidar)and high-performance computing platforms for autonomous driving will increase with the implementation of more advanced technologies.Even traditional gasoline powered cars(the current market leaders)are accelerating their embrace of intelligenc
78、e,a trend that also will increase demand for the above technologies and hardware.Similar to other industries,NEV firms select sites based on factors like the local research ecosystem and availability of talent.NEVs extensive supply chains mean that both upstream and downstream companies will seek op
79、portunities to cluster together,while the diverse and unique site selection requirements of companies in different fields become apparent.For example,companies specializing in autonomous driving and onboard sensors require test road networks for product testing,development,and implementation.The Jin
80、qiao submarket has a strong foundation in automotive manufacturing including related testing infrastructure,making it popular among NEV firms and giving the submarket one of Shanghais densest concentrations of NEV enterprises.Figure 18.Figure 18 Distribution of NEV Tenants in Shanghai Business Parks
81、Source:JLLNEV Tenant ConcentrationBusiness Park SubmarketsShanghai Ring RoadsMetro linesAutopilotVehicle ManufacturingPerception SystemMotor&DrivetrainBattery ChargingSmart CockpitMotor ControlBattery CellsSmart CommunicationCharging Piles3.5%Share of NEV Tenants in Shanghai Business Parks(By Leased
82、 Area)13Embracing Changes,Forging New Paths:Shanghai Business Park Property Market Outlook14Figure 19.Sales Revenue for Games Developed by Local Companies5.GamingSince China began to reissue game licenses in April 2022,the countrys gaming industry has grown at a healthy pace with strong long-term pr
83、ospects.As one of Chinas key gaming sector hubs,Shanghai saw total sales revenue of online games reach RMB 128.03 billion in 2022,notching positive growth despite a challenging macro environment.Nearly a quarter of Chinas top 50 gaming companies in terms of revenue are located in Shanghai.Shanghai p
84、laces particular emphasis on fostering gaming firms original development capabilities,and has implemented Chinas largest number of supportive policies.specialized and sophisticated SMEs in the gaming industry are among the most recognized in Shanghai.Shanghais gaming companies lead the country in th
85、eir proportion of R&D experts,investment in R&D,and intellectual property.In 2022,revenue from independently-developed online games made by Shanghai-based firms reached RMB 88.07 billion,representing nearly 40%of the national total.According to JLL research,the gaming industrys leased area in Shangh
86、ai business parks accounts for 6.6%of Source:China Game Industry Group Committee(CGIGC),JLLSource:JLL05003002002020212022ChinaBillion RMBShanghaiShare of Gaming Tenants in Shanghai Business Parks(By Leased Area)total leased space.Gaming companies have a significant presence in
87、Caohejing Business Park,where the gaming industry takes up 21%of total leased area.Caohejing has established itself as a prominent hub for Shanghais gaming industry,attracting many leading domestic and foreign gaming firms to set up operations.As the gaming industry begins to embrace new technologie
88、s such as AI and sensor interaction,we expect that the technology spillover of Shanghais gaming firms will further expand.Figure 20.Distribution of Gaming Tenants in Shanghai Business Parks6.6%Gaming Tenant ConcentrationBusiness Park SubmarketsShanghai Ring RoadsMetro lines14Embracing Changes,Forgin
89、g New Paths:Shanghai Business Park Property Market OutlookOpportunities from industry crossover and collaborationIndustry collaboration:leading business parks to a new stageThe pursuit of innovation has led many strategic emerging industries and the aforementioned five in particular to embrace ever-
90、longer industrial value chains and further embrace technology.Firms are rising to identify new downstream applications and develop upstream capabilities to serve them.Strong demand is leading upstream companies to branch out into new fields,forming companies that cross multiple industries.Technologi
91、cal progress and industrial upgrading are encouraging downstream enterprises to explore potential applications of emerging technologies and boost their own innovation and 11 submarkets200 projects 3,600+companies competitiveness.In the process,firms in different industries are crossing over and coll
92、aborating with each other more and more,reducing the boundaries between different sectors.JLL Research inspected eleven of Shanghais business park submarkets to categorize over 3,600 companies in nearly 200 projects.Our analysis reveals that nearly 36%of enterprises in Shanghais business parks span
93、two or more industries,reflecting the ongoing trend towards industrial crossover,integration,and collaboration.Cutting-edge industries such as life sciences,new energy vehicles,and TMT are increasingly overlapping with the artificial intelligence industry.In addition,collaboration levels are rising
94、between TMT companies and traditional industries such as manufacturing and professional services.In terms of the mode of industry crossover,firms increasingly favor deep collaborative partnerships guided by the market and product.These types of cooperation go beyond technology exchange and resource
95、sharing to other dimensions such as market expansion and innovation.This provides new impetus for closer interconnection and mutually beneficial development among industries.15Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookFigure 21.Tenant Profile and Industry Cros
96、sover,Shanghai Business ParksLife SciencesNew Energy Vehicles(NEVs)Integrated CircuitsGamingAIInternet Services&SofwareOther TMTElectronics ManufacturingTraditional ManufacturingAdvanced MaterialsAdvanced EquipmentEnergy&MiningLogistics&TransportationFinanceProfessional ServicesTechnical ServicesRet
97、ail&TradingConstruction&Real EstateSports&Entertainment3rd Party Ofice OperatorsGov Agency&Public OrgsNote:Industry proportion based on the tenants leasing area;Industry collaboration analysis according to the number of tenants.Source:JLL16Embracing Changes,Forging New Paths:Shanghai Business Park P
98、roperty Market OutlookEach of Shanghais business park submarkets has its own industrial positioning and structure,giving rise to unique trends in industrial collaboration and integration.As one of Shanghais high-tech innovation hubs,Zhangjiang primarily is driven by three leading industries and supp
99、orted to a large extent by the TMT industry.In addition,traditional industries such as manufacturing,financial services,and professional services also exhibit varying tendencies towards collaboration and integration.Meanwhile,Caohejing is highlighted by its strong presence of TMT and gaming firms.Li
100、fe SciencesNew EnergyVehicles(NEVs)IntegratedCircuits GamingInternet Services&SofwareAI Other TMTElectronics ManufacturingTraditional ManufacturingEnergy&MiningLogistics&TransportationFinanceProfessional Services Technical ServicesRetail&Trading Sports&Entertainment Construction&Real Estate 3rd Part
101、y Ofice Operators Gov Agency&Public OrgsAdvanced MaterialsAdvanced EquipmentLife SciencesNew Energy Vehicles(NEVs)Integrated CircuitsGamingInternetServices&SofwareAIGov Agency&Public Orgs 3rd Party Ofice OperatorsSports&EntertainmentRetail&TradingProfessional Services FinanceLogistics&Transportation
102、Energy&MiningAdvanced MaterialsAdvanced EquipmentTraditionalManufacturingElectronics Manufacturing Other TMTTechnical Services Construction&Real Estate Figure 22.Tenant Profile and Industry Crossover,Zhangjiang SubmarketFigure 23.Tenant Profile and Industry Crossover,Caohejing SubmarketNote:Industry
103、 proportion based on the tenants leasing area;Industry collaboration analysis according to the number of tenants.Source:JLLNote:Industry proportion based on the tenants leasing area;Industry collaboration analysis according to the number of tenants.Source:JLL17Embracing Changes,Forging New Paths:Sha
104、nghai Business Park Property Market OutlookIndustries of the future As industries continue to undergo deeper crossover,collaboration,and integration,entirely new types of industries are expected to emerge.This process also will provide opportunities for traditional industries to transform and upgrad
105、e,boosting Shanghais business parks.Future technological advancements are expected to extend the trend of industrial integration toward a wider range of industries,further supporting leasing demand.The combination of upstream technology-driven industries with downstream end-user markets characterize
106、d by extensive application scenarios or favored by capital is expected to continue.Take artificial intelligence as an example:its ability to integrate with and support other fields is evidenced in industries such as life sciences,TMT,and new energy vehicles.Significant achievements have been made in
107、 areas such as pharmaceutical R&D,big data analytics,and autonomous driving.Collaboration between industries holds considerable potential;looking ahead,gaming companies might cooperate with providers of brain-computer interface technology;or traditional retailers might find ways to integrate smart m
108、aterials.This trend will continue to drive industrial development,create opportunities,support transformation of traditional industries,and contribute to future demand for industrial parks.Shanghais“Three-Year Action Plan(2023-2025)for Promoting High-Quality Development of Manufacturing Industry in
109、Shanghai”outlines support for three leading industries and six key industries.*The citys 2030 Vision Plan targets output value of RMB 500 billion for industries of the future,and aims to establish several world-leading clusters in cutting-edge industries by 2035.These clusters will include brain-com
110、puter interfaces,synthetic biology,artificial general intelligence(AGI),new energy storage,high-end membrane materials,metaverse,and other advanced sectors.Industry crossover in these emerging fields will become an important force in cultivating entirely new industries in the future.These new indust
111、ries will have policy support and benefit from access to high-quality business park properties,and their rise will reshape leasing patterns in Shanghais business parks.Three leading industries are Biopharmaceuticals,Integrated Circuits,and AI;Six key industries are Electronic Information,Automobiles
112、,High-end Equipment,Advanced Materials,Life Sciences and Healthcare,Modern Consumer GoodsFigure 24.Examples of Future Industries Rising from Collaboration Between Existing OnesGamingAIAIIntegrated Circuits Automotive/Consumer ElectronicsIntelligent Materials Life SciencesSuperconducting MaterialInte
113、rnetTraditional retailingSource:JLLPhotovoltaic18Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookExpanding consideration of site selection factors and greater industry-oriented approachesCompanies often prioritize a projects cost,property quality,and surrounding inf
114、rastructure and amenities when selecting office locations.However,recent economic and technological advances are pushing firms to expand site selection criteria beyond a focus on office space.More and more companies are establishing real estate strategy departments to optimize site selection,office
115、layout,and other strategies to control costs,enhance efficiency,and ensure that office space serves long-term development.Traditionally,tenants seeking business park locations consider factors such as rental costs,policy support,project quality,nearby amenities,and transport access.Industrial upgrad
116、ing and technological improvements now are leading firms also to consider allocation of industrial resources and production factors within physical space.They also place greater emphasis on real estate strategies in their companies long-term development.In addition,companies now take into account fa
117、ctors such as submarkets research atmospheres,the clustering of upstream and downstream enterprises from specific industries value chains,the availability of talent,the companys image,the ease of obtaining financing,as well as supporting facilities that can attract talent and the companys performanc
118、e in terms of environmental,social,and governance(ESG).Meeting tenants industry-specific needs02Talent housing and other amenitiesProperty specificationsGovernment subsidiesRental costF&B outletsTransport accessibilityFinancingESGCorporate brandingInnovation environmentTalent resourcesFigure 25.Tena
119、nts Expanding Range of Site Selection FactorsSource:JLLTraditional factorsIndustry-focused factorsIndustrial value chain19Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookTo help landlords understand the needs of tenants and cultivate an industry-oriented mindset,JLL
120、 has conducted a survey of 103 tenants in Shanghais business parks.The survey explores how companies can leverage real estate strategies to reduce costs and increase efficiency amid ongoing macroeconomic transformation.Survey respondents include tenants from eleven of Shanghais business park submark
121、ets covering twelve specific industries and a range of lease sizes.Figure 26.Tenant Survey Respondent Breakdown103 tenants11 submarkets 12 industries“To adapt to changing demands of tenants like those discussed earlier in this report,business park landlords seek to attract high quality tenants and c
122、apital as well as enhance their projects operations.Landlords must build projects that align with their submarkets industrial development objectives and satisfy high-tech companies requirements,while also improving their asset management capabilities.In summary,business park landlords who want to st
123、and out from the competition must adopt an industry-oriented mindset to serve the rapid development of high-tech tenants.18%2,00011%20,000By Employee CountBy Leased Area(sqm)27%Core Zhangjiang22%Caohejing11%Non-core Zhangjiang area10%Jinqiao8%Shibei5%Linggang3%Lingkong3%Yangpu1%Waigaoqiao1%Songjiang
124、1%Minhang7%OthersBy Office Location(Submarket)19%Life Sciences13%Manufacturing10%Integrated Circuits,Chips10%AI10%Internet&Sofware Services8%Chemistry7%New Energy Vehicles6%Gaming5%Retail&Trading4%New Materials&New Energy4%Professional Services1%Financial Services3%OthersBy Industry SegmentSource:JL
125、L 2023 Shanghai Business Park Tenant Survey20Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookOur survey findings reveal that companies are considering ever more factors when choosing submarkets.Traditionally important factors such as rental costs and transport acces
126、s remain important for a majority of business park tenants.Rental costs in particular have gained prominence in the current market environment as firms seek to save costs and improve efficiency.Beyond those traditional factors,tenants are also giving attention to other criteria.The most important co
127、nsiderations in submarket selection now include submarkets infrastructure and amenities(such as housing for talent and lifestyle services),compatibility with corporate branding,and access to talent.Business park tenants are no longer content with the presence of a few restaurants nearby;they now dem
128、and locations that offer housing and Figure 27.Tenant Site Selection Factorsa comprehensive range of lifestyle services that address employees holistic needs while fostering stronger bonds between the workforce and the organization.In addition,more companies recognize that submarket selection and pr
129、operty choices can enhance their corporate branding.Firms that secure a standalone property or select a location in a submarket where their industry already has a mature presence can improve their corporate image and attract a wider range of talent.Access to a large pool of high-quality talent is cr
130、ucial for companies in business parks,especially those whose competitiveness depends on research and development.Submarkets with vibrant research atmospheres give companies enhanced collaboration opportunities and avenues for knowledge exchange.Our survey results show a substantial increase in the s
131、ignificance that tenants place on research atmosphere in site selection.Source:JLL 2023 Shanghai Business Park Tenant SurveyTechnological progress is forcing multiple industry types to grow ever more specialized and segmented,leading to a greater emphasis on industry and sector-specific factors in s
132、ubmarket selection.As a result,companies place varying emphasis on different submarket selection factors based on their specific characteristics.For example,tenants in the life sciences industry give greater weight to accessibility of high-quality talent and experts.Our survey shows that over 40%of
133、life sciences tenants indicate a significant increase in their consideration of talent accessibility in current submarket selection.Companies in integrated circuits and artificial intelligence also value talent access,while also emphasizing factors such as research atmosphere and policy support.New
134、energy vehicle companies have industry-specific product development and testing requirements,leading them to give particular weight to property specifications when choosing locations.Companies in the gaming industry prioritize access to game development talent,with transportation access also emergin
135、g as an important factor.Many of these firms require server facilities,making stable power supply delivery standards a significant factor in site selection.012345Current Previous Traditional factors RentsTransport AccessibilityProperty Specifications Government SubsidiesF&B OutletsAmenities(e.g.tale
136、nt housing)Financing OpportunitiesESGUpstream and downstream companiesInnovationEnvironmentCorporate brandingTalentIndustry-focused factors 21Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookTenants increasing emphasis on specific details when leasing properties refl
137、ects a strong desire to align with their business growth and operations.Our survey results indicate that tenants continue to value essential criteria such as business park infrastructure and whether the site meets R&D requirements,while also putting growing emphasis on properties autonomy and flexib
138、ility.Nearly 40%of respondents expressed interest in turnkey projects,while a similar proportion indicated a demand for standalone properties.Properties with a high level of privacy offer enhanced security for companies research,operations,and data.Figure 28.Detailed Ranking of Factors Influencing T
139、enants Property SelectionSource:JLL 2023 Shanghai Business Park Tenant SurveyIn terms of park services,property management remains the most crucial factor for tenants at present.However,companies increasingly value additional services provided by property owners,particularly those that facilitate bu
140、siness growth and development.A significant 51%of survey respondents expressed hope that landlords can offer services such as policy guidance and assistance with talent relocation.Moreover,45%of respondents expect park owners to provide support for specific requirements associated with the research
141、and development process,such as wastewater treatment and gas disposal.A further 32%of companies wished for park owners to cultivate an atmosphere of innovation and provide opportunities for industry collaboration and knowledge exchange.Shared lab spaceProximity to testing agencies or other administr
142、ative departmentsGreen property certifications(e.g.LEED,WELL)Shared areas(meeting rooms,office space,etc.)Product display spaceBranding on property faadeIncubator with qualification for policy subsidiesInnovation atmosphere and networking opportunitieswithin and across industriesPrivacy and data sec
143、urityStandalone projectTurnkey opportunitiesSpecific R&D requirements(e.g.waste disposal)Policy guidance,talent settlement assistance,and other enterprise servicesProperty management0%10%20%30%40%50%60%22Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookTwo approaches
144、 to cater to tenants unique needs:property condition and asset management servicesYears of evolution have helped Shanghais business parks advance in significant ways,including property quality.An increasing number of companies now place particular emphasis on landlords capacity to be adaptable in bu
145、siness development methods.This is prompting property owners to broaden their strategies to manage operations and attract talent.They will need to adopt an industry-oriented perspective as they both upgrade property conditions and adapt their own asset management services.While satisfying tenants ba
146、sic operational requirements,business park properties must also consider the specific demands of tenants in different industries.In the broader context of industrial upgrading and development,park operators need to provide abundant resources and convenience for tenants business operations.Our latest
147、 survey reveals that 89%of tenants are not satisfied with current conditions or their business park projects asset management services.More than 70%of tenants desire improvements in property conditions,while 43%of respondents wish to see further advancements in asset management services.Both propert
148、y conditions and asset management services can have varying degrees of potential for enhancement,giving business park landlords different approaches to consider when making improvements.Figure 29.Property conditions and asset management need improvementSource:JLL 2023 Shanghai Business Park Tenant S
149、urvey89%71%43%of BP tenants believe current property conditions and asset management need to be improvedbelieve that asset management needs improve-mentbelieve that property conditions need improvement23Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookIn Core Submark
150、etsMin=0.1 million sqmMax=1.74 million sqm2026-2028Supply Volume2023-2025In Emerging SubmarketsBaoshanPutuoChangningXuhuiQingpuSongjiangMinhangFengxianPudongJingAnFigure 30.Shanghai Business Park Future Supply,4Q23 to 2028*Self-use projects not included.Source:JLLAs the industrial value chains in bu
151、siness parks become more holistic and their range of industries continues to diversity,various industries will emerge with more requirements for production factors.As a result,we expect to see new perspectives and requirements emerging in tenant demand.Shanghais business park property market is witn
152、essing a surge in supply,creating a window of opportunity for tenants to leverage large supply and declining rents to relocate and upgrade.The means by which existing projects stay competitive and future projects differentiate themselves all hinge on cultivating an industry-oriented mindset by thoro
153、ughly understanding tenant requirements.24Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookElevating Business Park Quality:Targeted property improvements can cater to needs of different industriesProperty condition and specificationsWith a surge of new supply forecas
154、t,existing projects face heightened competition in terms of hardware and facility quality.Survey results reveal that parking availability is the most pressing issue,with over 50%of tenants expressing dissatisfaction.Other hardware concerns include roof and facade leaks,inadequate restroom ratios,out
155、dated air conditioning systems,issues with expanding power supplies,and insufficient EV charging stations.Enhancing facilities and property conditions to meet tenants urgent needs can help existing projects boost competitiveness amid large supply.Developers of future business park projects also woul
156、d do well to consider tenants hardware requirements.In addition to tenants basic hardware and facility needs,business park landlords must incorporate an industry-oriented perspective into the specifications of new projects by considering the diverse needs of different industries.Tenants from a range
157、 of industries will have varying demands for hardware and property specifications,depending for example on whether they will use space for offices or research and development purposes.Companies in industries that require R&D spaces have the most unique specification requirements.The match(or lack th
158、ereof)between tenants specification needs and what targeted properties can offer may become a determining factor in tenants project selection decisions.Business park projects that can meet the specific requirements in terms of floor loading capacity,ceiling height,power supply,and other factors are
159、more likely to attract enterprises with R&D and testing functions.NEV companies conducting research and testing will prioritize the mobility of vehicles or large-scale machinery,necessitating careful consideration for bearing of both live Figure 31.Property issues most in need of improvement,accordi
160、ng to tenantsSource:JLL 2023 Shanghai Business Park Tenant Survey0%10%20%30%40%50%Lack of public spaceInsufficient orbelow-expectation green spaceFailure to meet R&D requirementsInsufficient load-bearingInsufficient ceiling heightInsufficient elevator allocationMismatched spaces for leasePoor lobby
161、conditionInsufficient charging stationsInability to expand power supplyOutdated air conditioningequipmentInsufficient restroomsRoof or facade leaksInsufficient parkingand dead loads.Moreover,research and testing machinery in various industries are likely to have specific requirements for ceiling hei
162、ghts.Meanwhile,uninterrupted and stable 24-hour power supplies are crucial for gaming and AI firms office spaces as well as the R&D spaces of life sciences,integrated circuit,and NEV firms.Therefore,properties equipped with dual-circuit power supply or backup power generation devices such as UPS are
163、 highly favored by tenants.The life sciences industry places significant emphasis on waste management and disposal during the R&D process.This translates into specific building specifications and requirements for facilities and spaces capable of effectively managing solid,liquid,and gas waste.25Embr
164、acing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookFigure 32.Specification Preferences For Tenants in Shanghais Five Major IndustriesSource:JLLFundamental Requirement for Office FunctionsNEVsLife SciencesIntegrated CircuitsAIGamingFloor Loading (kg/sqm)-300200-30
165、-300200-300Net Ceiling Height(m)2.72.72.7 Livestreaming Room 4.0(slab to slab)2.7 Livestreaming Room 4.0(slab to slab)2.72.7 Livestreaming Room 4.0(slab to slab)Electricity Capacity (W/sqm)80-12080-12080--120100-120Standard Floor Area(sqm)1,5001,5001,5001,500Large occupiers fa
166、vors large single-floor spacesLarge occupiers favors large single-floor spacesConstruction Ratio 65%65%65%65%65%65%Raised Floor(mm)0100150Air ConditionVRV/FUC/VAVVRV/FUC/VAVVRV/FUC/VAVVRV/FUC/VAVPrefer VRVPrefer VRVFresh Air Rate (m/h/person)3030303035-4035-50InternetTypicalTypicalTypical
167、 Dedicated network and supply Dedicated network and supplyDedicated network and supplyOthers/Some tenants favor ground floor showroom space with retail functions/Some require anti-static epoxy flooringFundamental Requirement for R&D functionsNEVsLife SciencesIntegrated Circuits(Design/Testing);struc
168、ture.AI(Cloud/Computing)GamingFloor Loading (kg/sqm)200-300Dead load 500;Live load reach to 1 ton for some companies500 Structure able to be reinforced500 Structure able to be reinforced500 Structure able to be reinforced500(Computer room);Structure able to be reinforcedCeiling Height(m,Slab to Slab
169、)4.2Height under beam5.54.5 Clean room5.54.5 Clean room5.5Tend to 4.5Tend to 4.5Electricity Capacity(W/sqm)80-120No specific requirementsMeets conditions for expansionMeets conditions for expansionMeets conditions for expansionTend to 100Air ConditionNo specific requirements/Meets conditions for sel
170、f installationMeets conditions for self installationMeets conditions for self installation/RooftopNo specific requirements/Reserve space for installation of activated carbon filters and other devices;Structure able to be reinforcedReserve space for installation of activated carbon filters and other
171、devices;Structure able to be reinforced/Exhaust SystemNo specific requirementsMeets conditions for self installationMeets conditions for self installationMeets conditions for self installation/Wastewater and Waste Liquid TreatmentNo/RequiredRequired/Independent Drainage PipelineOptional/RequiredRequ
172、ired/Solid Waste Storage AreaNo/RequiredRequired/Detachable Faade OptionalNice to haveNice to haveNice to have/Epoxy RequirementNo specific requirementsEpoxy floor or plastic solid wear-resistant floorPrefer epoxy flooringPrefer epoxy flooringSelf installed anti-static floor preferred for some compa
173、nies/Freight ElevatorOptionalHigh requirements for cab size,loading,and doorway size/Other Special Specifications/Column distance8.1m;garage ramp(elevation2.4m);Road network testing preferredReserve outdoor space for installation of cooling towers,special gas storage,or other devices/26Embracing Cha
174、nges,Forging New Paths:Shanghai Business Park Property Market OutlookComplementary facilities and amenities have been consistent critical factors influencing tenant site selection.Business park operators can improve tenant satisfaction and retention by enhancing availability of these amenities.More
175、than 85%of respondents expressed preferences for business parks to offer F&B outlets in the vicinity.Moreover,over 60%of tenants believe that business parks need convenience stores or supermarkets to meet the daily needs of their employees.Beyond these fundamental requirements,business park tenants
176、increasingly prioritize workforce quality of life.Over 50%of tenants expect the park to provide shuttle services to aid their commutes,while a similar percentage of surveyed enterprises express the desire for business parks to include fitness facilities in leased premises.Business park amenities and
177、 infrastructure Figure 33.Ranking of Tenants Preferred Business Park AmenitiesSource:JLL 2023 Shanghai Business Park Tenant Survey0%10%20%30%40%50%60%70%80%90%100%Pickup Points for Take-out FoodBusiness Dinner SpaceConference CenterRegular Shuttle ServiceGymCafeteriaConvenience Store/SupermarketDail
178、y Catering27Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookThe importance of Chinas“dual-carbon”climate targets as a long-term goal is increasingly evident for both business park landlords and tenants.Established business park operators(both domestic and internatio
179、nal)have integrated a range of technologies to reduce energy consumption in project development and operations.These include optimized building design,photovoltaic panel installation,and carbon asset management systems.Tenants express strong preference for business park projects that satisfy their E
180、SG-The number of green building certifications in Shanghais business parks has increased year to year.The total GFA of all LEED-certified projects in Shanghais business parks exceeds four million sqm.Chinas“dual-carbon”targets make it likely that more business park tenants will prioritize ESG-relate
181、d requirements in their site selection and daily operations.R&D-oriented tenants in business parks often have higher demands for power supplies and may have specific requirements for waste management and disposal.Landlords whose projects can support tenants energy conservation and environmental prot
182、ection goals may have an advantage in attracting tenants.ESG and green projectsFigure 34.Tenants Green Leasing RequirementsFigure 35.LEED-certified Projects in Shanghai Business Parks,by GFASource:JLL 2023 Shanghai Business Park Tenant SurveySource:U.S.Green Building Council,JLL0%20%40%60%80%100%Reg
183、ular energy and waste auditsChannels to purchase renewable energy,such as green electricity and green certificatesWater-saving devices(e.g.to control toilet flush volume)Data sharing and transparency regarding energy consumptionWaste management measures to reduce landfill wasteGreen building certifi
184、cations(e.g.LEED,WELL,BREEAM)Installing EV charging stationsIndoor air quality control and testingImproved energy eficiency and reduced energy consumption(e.g.energy-saving lights)ForeignDomestic39%of surveyed enterprises have certain requirements for green leases05001,0001,5002,0002,5003,0003,5004,
185、0004,500200920000022 2023H1GFA(Thousand SQM)For-lease ProjectsSelf-use Projectsrelated needs.Research on green leasing*demand reveals that 39%of tenants are interested in green leasing,with foreign tenants showing stronger interests.Key areas of tenant foc
186、us include energy reduction,air quality improvements,EV charging station installation,and green building certifications.(*Note:Green leasing refers to lease agreements between business park operators and tenants that aim to fulfill the sustainable development goals of both parties in operation and m
187、anagement).28Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookSource:JLL 2023 Shanghai Business Park Tenant SurveyIndustry-oriented asset managementBusiness parks asset management services are an increasingly significant factor in tenant site selection.Tenants expect
188、 to access a diverse range of industry development resources through asset management services offered by landlords.Our research shows that nearly half of the tenants would prefer additional services,including government relations assistance and landlord-organized industry seminars.Asset management
189、services are no longer limited to simple property management,and landlords that provide a greater range of industry-specific resources to tenants will have a core competitive advantage going forward.Figure 36.Ranking of Tenants Preferred Business Park ServicesFigure 37.Mismatch Between Preferences f
190、or Tenant Service and Landlords Willingness to InvestSource:JLL 2023 Shanghai Business Park Tenant SurveyProperty Management ServicesIndustry-oriented ServicesTenantsLandlords57%consider important77%willing to invest43%consider important23%willing to investProperty Management ServicesIndustry-orient
191、ed Services0%10%20%30%40%50%60%70%80%ESG improvement assistanceProvide financing channels and investor resourcesProvide talent housing,talent recruitment,and related informationIndustry collaboration resources and opportunitiesPolicy guidanceSupport in EIA approvalImprovement in lobby reception serv
192、icesEnhancements in automation and digitizationSupport with approvals for construction and renovationFrequency of security and maintenance;professional property managementBasic maintenance for property and facilitiesHowever,our survey results reveal a degree of mismatch between tenant preferences an
193、d landlords willingness to invest in property management and industry services.While 43%of tenants consider industry services highly important for site selection,only 23%of business park landlords expressed willingness to increase their investment in this area.Currently,a large majority(77%)of landl
194、ords still prioritize traditional property management services.Enhancing property management can indeed improve the tenant experience and maintain project competitiveness in the short-term.Looking ahead,though,we believe that the diversifying macro-industry landscape will necessitate greater emphasi
195、s on industry services in project operations.29Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookMature overseas markets offer strong examples of how capable landlords can offer asset management services that leverage industry-specific connections to empower tenants a
196、nd cultivate high-quality startups,boosting the development of the surrounding submarket.Located in Munich,Germany,BioM is an operator management company for life sciences clusters that was founded in 1997.It oversees multiple life sciences clusters in Bavaria,managing operations and facilitating co
197、llaboration among tenants.Leveraging its wide industry resource network which includes government entities,investment institutions,universities,research organizations,and industry associations BioM provides services and development support to its tenants.Additionally,BioMs deep understanding of its
198、industry and tenants lets it act as an incubator,identifying companies with strong potential and supporting high-value-added startups.Overseas cases of asset management servicesFigure 38.Framework of experienced asset management service modelSource:BioM,JLLNetworking&Collaboration Support Government
199、 Universities Industry Associations Research Institutes Hospitals Investors OthersIncubators for startupsMarketing Support Support companies in establishing new business contacts Provide professional resources for companies technology transfer and patent application Establish partnering portals Hold
200、 industry affairs in cooperation with other industry participants Consult small and medium-sized companies in financing by public funding and other investors Hold career orientation events Have an exclusive recruitment website page,which publishes job opportunities of companies from clusters Establi
201、sh partnership with universities,research institutes and hospitals in the clusters Establish various incubation programs in cooperation with other parties to provide support along different business process -Provide shared lab space,co-working,community space,etc.-Provide networking opportunities wi
202、th different industry participants(strategy consulting,investors);-Establish awards and prizes aimed at academic research projects with spin-off potential in the field of biomedicine;-Courses and field trips;-Industry experts contribute as volunteer mentors;-Pitch training -Industry affairsPromoting
203、 brands through various channels -Online channels -Print media -events -Provide space for companies own events -Support companies to participate in large-scale industrial exhibitions and academic conferencesTalent Recruiting SupportFunding Advisory&SupportOperation&ManagementAsset ManagementParticip
204、ants30Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookBesides basic business park operation and management,landlords asset management services tend to focus on one of five key dimensions that support development of tenants.These dimensions include industry exchange
205、and collaboration,financing support and consulting,talent,incubation,and marketing.Industry exchange and collaborationHere,the landlords assist tenants in establishing partnerships.When individuals or companies seek new products,technologies,or partners,they can directly contact the landlord of the
206、business park,who can help identify collaboration opportunities.If tenants require support in patent applications or technology transfer,they can first make relevant connections with those companies or institutions incorporated with the landlord.Additionally,landlords can collaborate with domestic a
207、nd international industry organizations to build a more expansive platform for industry cooperation,creating even more diversified collaboration opportunities for partners.Financing support The landlord proactively seeks financing opportunities for small to medium tenants(SMEs).This involves setting
208、 up collaborations with institutional investors,pursuing government support and subsidy programs,and cooperating with domestic and international industry organizations.This range of financing channels can help tenants prospects and accelerate their development.TalentThe landlord takes steps to foste
209、r connection between talent and local enterprises.For instance,a dedicated recruitment page on the cluster operators official website can be an effective channel for tenants to tap the local talent pool.Landlords also can host job fairs.By connecting top talent with compatible enterprises,these meas
210、ures can further support the advancement of local industries.IncubationBesides hosting its own internal incubation programs,the landlord can partner with local governments and other institutions to carry out other incubation projects.These initiatives can encompass office and R&D spaces,capital supp
211、ort,business development guidance,and industry networking.The landlord also may establish research awards and grants for academic projects with commercial potential.These measures provide support and incentives to startups,fostering their growth and advancement.MarketingLandlords can help enterprise
212、s conduct promotions through online channels,internal publications,and offline events.Tenants can also use the clusters public spaces to host their own offline activities.The landlord can also represent or assist companies in major exhibitions and academic conferences,helping them expand their marke
213、t reach and enhance brand influence.31Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookInvestment models diversify,enriched by industry focus03Industry-specific approaches enhance business park investmentA look back at the past ten-plus years of Shanghais business pa
214、rk market reveals three distinct phases.From 2011 to 2015,a climbing cycle in overall commercial real estate investment helped the citys business parks catch the attention of institutional investors.Both opportunistic and value-add players were active,and transaction volumes grew steadily(average an
215、nual volumes reached RMB 5.0 billion during this period).In this first phase,investors viewed business park assets as similar to industrial properties.Shanghais overall commercial real estate market advanced further in the second phase(2016-2019),with average annual investment volumes exceeding RMB
216、100 billion.Office transactions were particularly active in this period,accounting for 55%of the total.Shanghais business parks found favor among investors as an extension of this trend toward office assets,and the business park investment market saw a significant rise in deal volume and liquidity,w
217、ith average annual turnover reaching RMB 14 billion over 2016-2019.Over this period,domestic and foreign real estate funds approached business parks as office-like assets located in decentralized areas of the city.Since 2020 the market has entered a third phase in which investors have further concen
218、trated on business park assets,with average annual transactions volumes on track to reach RMB 14.5 billion over the 2020-2023 period.*This period has been characterized by a shift away from treating the business park market simply as an extension of office investment to a new perspective focused on
219、the industries in the business parks.Take life sciences properties a typical business park asset as an example:scarcity and strict environmental impact assessment(EIA)standards have made life sciences properties some of the most sought-after property types in Shanghai.Shifts in Shanghais economic st
220、ructure also are privileging the development of high-tech industries,further driving demand for business parks.Meanwhile,the issuance of C-REITs has broadened investors potential exit strategies and attracted a greater range of institutional investors to consider business park properties.*annual vol
221、ume includes the forecast volume of 2023.32Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookSource:JLLFigure 39.Annual Investment Volume and Stages of Development in Shanghai Business ParksRising attention from investorsEmergence of industry-focusedperspectivesNatura
222、l extension of office investmentFeatureInvestmentEnvironmentInvestorInstitutionsInvestmentStrategiesLife sciences property,R&D property,land development,portfolio dealsPure office format assets on industrial land,multiple buildings in one campusLife sciences,integrated circuits,AI,New energy vehicle
223、s(NEVs),GamingTarget AssetsAnchor TenantsIndustry-focused perspective Office-like assets in decentralized marketInvestmentPerspective050020202120222023Q1-Q3Billion RMBIncreasing liquidity in commercial real estate;Foreign Investors seek high-growth opportu
224、nities in ChinaEarly Stage:domestic real estate funds dominantLater Stage:foreign real estate funds continue investing;increasing presence of domestic developer-backed investorsValue-add,core-plusLater Stage:deleveraging;rising financing costs for domestic investors;tax incentivesEarly Stage:loose m
225、onetary environment;tax incentives;Increasing investment volume Dominated by foreign real estate funds,with some domestic self-use investorsOpportunistic,value-addMainly en-bloc buildingsManufacturing,chemical&pharma-ceutical,semiconductor firms TMT firms dominant;back-offices for financial services
226、 firms,trading companies,co-working operatorsSimilar to industrial property Foreign real estate funds;Foreign private equity;self-use buyersDomestic insurers and pre-REITs funds start to investEarly Stage:COVID-19 pandemic;Significant financing volume in life sciences sectorValue-add,core-plus,core,
227、development,opportunisticLater Stage:U.S.interest rate hikes;geopolitical issues;C-REITs launched-20Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookSource:JLL 2023 Shanghai Business Park Investor SurveyInvestment strategies influenced by bo
228、th policy support and short-term supply pressureChinas business parks are key platforms in official strategies aimed at boosting innovation and industrial upgrading.Growth in strategic firms and sectors has channeled considerable demand to Shanghais business park market,portending a bright future an
229、d attracting the attention of investors.That said,the market is facing short-term challenges,as evidenced by significant upcoming supply and recent cautious leasing by potential tenants.In order to better understand Shanghais business park market and investor attitudes,JLL conducted a survey of more
230、 than 60 institutional investors representing a variety of capital sources and investment strategies.The survey results show that even considering recent short-term pressures,investors remain enthusiastic about Shanghai business parks.More than 70%of respondents already hold assets in Shanghais busi
231、ness park market,and 89%plan to make additional investments(or are considering acquiring business park assets)over the next three years.Figure 40.Investor Survey Respondent Breakdown48%Real estate funds20%Developers15%Insurance companies8%Trusts&REITs3%SWF/Pension funds3%Government platforms1%Indust
232、rial PE institutional investors2%Self-use enterprises11%HK&MAC&TW15%Other Asia18%Western countries56%Mainland ChinaSource:JLL 2023 Shanghai Business Park Investor SurveyFigure 41.Willingness and Reasons to Invest in Business Parksfollowing launch of REITsWider range of exit channelsStable leasing de
233、mandSteady rental growthDiversify risks by investing different asset classStrong resilience to economic cyclesHigh potential for capital value increasePolitical strategic investmentTax incentivesIndustrial benefits supportedby macro-economy62%27%89%9%of investors will make additional investments or
234、are considering buying BP assets in the next 3 yearswill make additional investments in the next 3 yearsnot invested,but plan to invest in the next 3 yearsInvested,but no plans for additional investment in the next 3 yearsNote:Font colors represents industry-focused perspective and traditional marke
235、t perspective.Font size depicts the importance of a certain factor.34Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookFigure 42Business Park Investment Perspectives:Traditional plus Industry-focused Source:JLLBusiness parks role as tools of regional economic and indu
236、strial planning distinguishes the sector from other commercial property types,with crucial implications for investment.Investors who approach business parks with traditional strategies like those they bring to office assets risk underestimating business parks focus on specific industry types,impacti
237、ng underwriting accuracy and decision-making.Our survey results show that many institutional investors indeed have a rising appreciation for this industry-focused perspective,building business park-specific investment strategies that consider site selection,tenant rent,investment models,and more.Aga
238、inst the backdrop of expected further policy support and short-term supply pressure,we believe Shanghais business park investment market displays four major trends,which are discussed in detail below.Traditional Market PerspectiveIndustry-Focused PerspectiveIndustry/sector positioning and submarket
239、maturityEIA and/or R&D conditions;building specifications must match needs of diferent industriesPolicy-driven or capital-favored industriesTax benefits;financing status;tax and production requirements/limitationsPE+RE;land acquisition with self-use companies;sale-leasebackR&D environment;talent hou
240、sing nearby;educational resourcesIncubation function;government-enterprise coordination;interaction across industries,etc.Submarket supply and demand;TransportationProperty quality and building specificationsTenant quality,tenant profile,and payment capacityWALE;room for rental growth;Operation and
241、management costTraditional ofice investment strategyTraditional amenities such as F&B and hotelsMainly focus on leasing and property managementLocationTarget AssetTenantsRental IncomeInvestment StrategyAmenitiesAsset Management35Embracing Changes,Forging New Paths:Shanghai Business Park Property Mar
242、ket OutlookApart from property quality,tenant structure,and other factors similar to commercial and office assets,business park investors must consider more factors related to industries.When selecting submarkets,investors also view assets from an industry-focused perspective.Our survey results show
243、 that submarkets industrial positioning is the core factor that investors consider in choosing business park assets,taking precedence over supply and demand,transportation,and other traditional site selection criteria.If a target asset is located in an area whose industrial positioning is in line wi
244、th broader official economic plans,it is likely to lease out at a faster pace to higher-quality tenants,and benefit more from supportive industrial policies.In addition,it will also have more industrial attributes when exiting,allowing it to be issued as a REITs product in the form of an“industrial
245、infrastructure construction publicly offered C-REITs”.We have observed new trends in submarket selection amid the latest phase of Shanghais business park investment market(2020 onwards).While investors continue to pay attention to mature,traditional business park submarkets such as Zhangjiang core a
246、rea,Caohejing,and Jinqiao,they are also expressing growing interest in other submarkets such as Kangqiao and Heqing(where sciences firms concentrate),along with submarkets in which other industries gathering.Although several mature business Trend 1:Rising consideration of industrial positioning in s
247、ubmarket selectionSource:JLL 2023 Shanghai Business Park Investor SurveyFigure 43.Ranking of Factors Investors Consider in Business Park PropertiesYear of InvestmentHighLowInvestor Interest2016 to 20192020 onwardsBefore 2016Submarkets industrial/sector positioningCash flow yieldRegional demand&suppl
248、yCurrent tenant structureBuilding specification(e.g.ceiling height/floor load capacity/waste discharge)EIA requirement statusTransportation convenienceLocal talent resourcesRegional tax benefits for tenantsIndustry-focused PerspectiveBusiness facilitiesTraditional Ofice Investment PerspectiveOther F
249、actors Impacting Investment DecisionsSource:JLLparks face pressure from large upcoming supply,mature and industry-focused business environments and established ecosystems give investors confidence in their future prospects.Figure 44.Investment in Shanghai Business ParksShowing Three Phases of En-Blo
250、c Transactions,and Level of Investor Interest in Major Business Parks36Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookWith upcoming supply large over the short term,institutional investors are becoming more cautious when evaluating tenants in the target properties.
251、Benefiting from industrial development,investors pay considerable attention to the industry categories of tenants target properties.They also consider the proportion of large occupiers and the Weighted Average Lease Expiries(WALE),in order to spread market risks through a more diverse tenant structu
252、re.Our survey results indicate that investors prefer tenants from industries favored by both policymakers and private capital.Consider the life sciences industry:while the sectors total investment and financing have declined since 2022,its strong long-term prognosis and relatively higher rental budg
253、et make life sciences tenants a preferred choice for many investors.Integrated circuits and artificial intelligence are two other leading industries in Shanghai that have attracted significant investor attention.Investors also are increasingly considering other industries targeted for policy support
254、,including new materials,new energy,and new energy vehicles.Institutional investors are coming around to small tenants in emerging industries with high value-added.A traditional investment approach might be wary of new industries like those described above due to perceived higher risks,greater uncer
255、tainty,and limited impact on properties rental incomes.Yet more than 80%of investors in our survey say they will consider incorporating startups in such emerging and fast-growing sectors in target properties tenant profiles.Trend 2:Investors focus on tenants industry type in evaluating propertiesSou
256、rce:JLL 2023 Shanghai Business Park Investor SurveyFigure 45.Ranking of Investor Priorities in Evaluating Tenants in Target PropertiesFigure 46.Ranking of Investors Preferred Tenant IndustriesFigure 47.Other Industries Investors Would ConsiderIndustry category/business sectorProportion of large tena
257、ntsWeighted Average Lease Expiry(WALE)Registration and taxation of anchor tenantsRental collection rateCapEx of anchor tenantsLife sciencesIntegrated circuitsAINew materials&new energyNEVsManufacturingInternetGamingRobotsFinaceProfessional servicesRetail&tradeStart-ups with high-value-addedFuture In
258、dustries(E.g.BCI,food tech,metaverse)Enterprises invested by parent companyNone37Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookAfter an extended period of stable growth,rents in Shanghais business parks have been impacted by a slow post-pandemic recovery in demand
259、.Combined with an increase in expected supply over the short term,this trend has left investors more cautious in their underwriting strategies.Two years ago,scarcity of assets allowed life sciences properties to gain traction,and investors adopted opportunistic and value-added investment approaches.
260、While the limited number of assets available then led investors to be more aggressive in their underwriting models,more recently they have adjusted strategies to focus on long-term returns.Approximately 69%of survey respondents indicate that underwriting strategies for business park properties have
261、grown more cautious compared to two years earlier.Among this group,around 90%have downgraded their expectations for annual rental growth and take-up rates,while 78.4%of Trend 3:Investment modeling for business parks turns conservativeSource:JLL 2023 Shanghai Business Park Investor SurveyFigure 49.Sh
262、are of Respondents Reporting Changes in Investor Modeling Compared with Two Years Earlier上调0.0%上调0.0%Increase78.4%Increase78.4%67.6%24.3%67.6%70.3%94.6%86.5%8.1%16.2%16.2%Unchanged5.4%Unchanged13.5%18.9%Unchanged13.5%Unchanged8.1%IncreaseDecrease13.5%IncreaseDecrease 2.7%Increase16.2%IncreaseIncreas
263、eCompared to two years earlier,69%of surveyed investors have grown more conservative in underwriting.DecreaseDecreaseUnchangedDecreaseDecreaseDecreaseUnchangedUnchangedAnnual Rental GrowthTake-up SpeedEntry Cap RateExit Cap RateFinancing CostAgency FeeCapex BudgetRelatedly,it is worth noting that bu
264、siness parks role as platforms for development in strategic industries means they have specific requirements for taxation,production capacity,and/or revenue.While including these factors in financial modeling may restrict some investors from entering the business park market,others remain optimistic
265、 about industrial development and confident in the leasing market.Nearly 40%of survey respondents are willing to go along with tax compliance requirements,especially government platform companies and private equity investors.Source:JLLFigure 48.Shanghai Core Business Parks Rental Trend0.01.02.03.04.
266、05.06.0200420052006200720082009200000222023Q3RMB/sqm/day4.5 RMB/sqm/dayrespondents have revised upward the expected entry and exit cap rates.These adjustments help investors improve risk control and anticipate short-term risks in leasing and conducting tra
267、nsactions.On the other hand,this cautious turn also reveals a strategic shift of investors attitudes toward business park properties,with more players focusing on long-term stable returns.38Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookInvestors are increasingly r
268、equired to have significant capital resources and project operation capabilities.This trend also has led to diversification in both investment methods and the range of investor entities.New and unique business park investment methods have evolved as the market has grown.For example,the strategy of s
269、ale and leaseback of owner-occupied projects has attracted attention from many market players,especially insurance companies and financial institutions that prioritize stable cash flow.In this approach,companies that own and self-use business parks sell their properties and invest resulting cashflow
270、 back into core business lines like R&D and production.The buyer operates and manages the property,while the seller becomes the anchor tenant,providing stable rental income and reducing investors asset management pressure and rental risks.In a second strategy,self-use enterprises can join forces wit
271、h investors to invest and develop properties.The self-use enterprise can become the anchor tenant of a built-to-suit property that meets required specifications for R&D and office spaces.Meanwhile,the investor partners can obtain discounts for sought-after land by bringing onboard enterprises that c
272、omply with business parks industrial planning strategies,allowing both parties to achieve their goals.In addition,private equity players have entered the business park market,introducing a new investment model that combines private equity and real estate funds.Private equity and venture capital inve
273、stment often target industrial sectors that are favored in economic development plans,and which overlap with key demand sources in many business parks.Some leading private equity institutions can help their real estate funds obtain property investment opportunities through the industrial qualificati
274、ons of invested companies and their real estate fund businesses.Trend 4:Industry orientation stimulates unique investment approachesSource:JLL 2023 Shanghai Business Park Investor SurveyFigure 50.Investors Preferred Strategies(multiple choices)Independent investmentJoint with domestic fundJoint with
275、 foreign fundJoint with self-use enterpriseJoint with government/administrative committee(enterprise)Joint with domestic developerJoint with PE/VC investorOthers39Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookCore and core-plus investment strategies grow more prom
276、inentIndustrial perspective stimulates long-term investment opportunities and diverse investment strategiesFigure 52.Investors Cap Rate Requirements for Shanghai Business Park Assets0%10%20%30%40%50%6.0%Entry Cap RateExit Cap RateSource:JLL 2023 Shanghai Business Park Investor SurveyFigure 51.Instit
277、utional Players Preferred Investment Strategies(multiple choices)50.9%61.8%60.0%52.7%40.0%27.3%CoreCore PlusValue AddedOpportunisticDistressedDevelopmentSource:JLL 2023 Shanghai Business Park Investor Surveysince 2020,the life sciences property sector has attracted significant attention due to the s
278、carcity of projects that can meet EIA requirements.Numerous real estate funds continue to follow a similar investment logic,looking for opportunities that can be converted to EIA-ready projects or value-added properties that can benefit from industrial policy support.The differentiation of investmen
279、t strategies is evident from expected returns on investment.A majority of survey respondents expect stabilized entry cap rates of between 5.0%and 5.5%for Shanghai business park assets,while expectations for exit cap rates are concentrated at 4.5%-5.0%,reflecting the markets preference for value-add
280、properties.It is worth mentioning that the dividend yield required by C-REITs provides a benchmark for business park investors in financial calculations,with nearly 45%of investors expecting a return cap rate of between 4.5%and 5.0%on exit.Some developers and real estate funds are seeking distressed
281、 assets or opportunities to acquire land for development projects with stabilized cap rates slightly decompressed.Chinas economy is transitioning to new drivers of growth,and the pace of industrial upgrade and innovation will continue to accelerate,opening new opportunities for long-term investment
282、in Shanghai business parks.Our survey results suggest that core and core plus investment strategies are increasing.Nearly 62%of institutional investors would consider core plus investment opportunities,versus 60%who would consider traditional value-add opportunities,and more than half of respondents
283、(51%)who would consider core investment strategies.Policy support for strategic industries means that business park assets can provide sustainable cash flows and stable returns through steady leasing performance by tenants in those industries.Such financial performance matches the asset management r
284、equirements for investors of core or core plus properties.Meanwhile,the increased focus on long-term capital also is providing more exit opportunities for opportunistic investors.Approximately 60%of survey respondents report they are considering value-add opportunities,and 53%are considering opportu
285、nistic strategies.As an example,40Embracing Changes,Forging New Paths:Shanghai Business Park Property Market OutlookFigure 53.Investors Anticipated Holding Period for Shanghai Business Park Assets(multiple choices)5-10 years3-5 years1-3 yearsLong-termSource:JLL 2023 Shanghai Business Park Investor S
286、urveyFigure 54.Investors Expectations for Cap RatesSource:JLL 2023 Shanghai Business Park Investor Survey0%10%20%30%40%50%0%10%20%30%40%50%50+bps decrease25-50 bps decrease0-25 bps decreaseRemain stable0-25 bps increase25-50 bps increase50+bps increaseNext 2 yearsNext 5 yearsDiverse exit channels fu
287、rther potential for liquidity growthHolding periods for business park properties match the aforementioned different investment strategies.The common duration of 3-5 years is in line with value-add or core plus funds.Notably,business parks roles in broader economic development planning are leading mo
288、re investors to consider a 5-10 year investment cycle or a long holding period.With the gradual expansion of the C-REITs market,more business park investors will consider long term strategies.In terms of expected returns,most investors believe that cap rates for Shanghai business parks will remain s
289、table over the next five years.That said,short-term supply pressure and uncertainty regarding the recovery of leasing demand have led 35%of respondents to expect cap rates to decompress in the next two years.In the long term,industry-supportive policies and the gradual maturation of C-REITs have led
290、 close to half of respondents to believe that the cap rate will return to a compression trend in the next five years.41Embracing Changes,Forging New Paths:Shanghai Business Park Property Market Outlook“C-REITs and the transition to core asset investment strategies both involve the long-term holding
291、nature of business parks.These characteristics require more from investors in terms of asset management and operation.Some experienced institutional investors have set up professional asset management platforms for business park properties to improve their ability to manage such assets from an indus
292、try-focused perspective.Investors in business parks must follow such industry-focused approaches through all aspects of investment in order to realize stable growth over the long term.Figure 55.Investors Planned Exit Channels for Business Park Projects(multiple choices)Source:JLL 2023 Shanghai Busin
293、ess Park Investor SurveyAs the business park investment market matures,exit channels are becoming more diverse.In addition to the traditional exit strategy for individual projects,exiting through C-REITs is expected to grow more common.Till September 2023,nine business park infrastructure REITs have
294、 been issued,with several high-quality Shanghai business parks in the portfolios.More projects are preparing for REITs issuance,and going forward we expect exit through C-REITs will be one of the main exit channels for business park properties.At the same time,although many existing property holders
295、 cannot yet directly issue C-REITs,the influence of REITs will provide the market with pre-REITs investment opportunities.Business park investors can incubate pre-REITs projects with their asset management capabilities,improve the operation of the projects to meet the requirements for stable operati
296、on,and then sell them to institutions that can issue C-REITs.Furthermore,investors expect that in contrast to current exit strategies for individual assets,going forward more exit strategies will take the form Via individual assetsVia domestic C-REITsVia asset portfolioVia foreign REITsof asset port
297、folios with a larger total deal size.The stability of business park property performance is in line with the investment preferences for long-term capital,and asset portfolios can better satisfy such capitals demand for deal size.42Eric PangHead of Capital Markets,China Business Contact:Anny ZhangSen
298、ior Managing Director,China Leasing;Managing Director,East China Stephen YuHead of Business Park Services,JLL Shanghai Office Leasing Advisory Sun LingHead of Capital Markets,East China Bruce PangHead of Research and Chief Economist,Greater China Daniel YaoHead of Research,China Main Author:Susan Di
299、ngDirector,Research East China susanTLeo ZhouAnalyst,Research East China leoJWFinn FengAssistant Manager,Research East China Oliver ChuSenior Analyst,Research East China Beijing8/F China Life Finance Centre No.23 Zhenzhi Rd,Chaoyang District Beijing 100026tel+86 10 5922 1300Chengdu29/F Tower 1,Cheng
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