China`s City Winners

WORLD WINNING CITIES | Global Foresight Series 2014
China’s City Winners
Xi’an City Profile
2 China’s City Winners
China’s City Winners: Xi’an
Jones Lang LaSalle’s View
As the largest city in north-west China and the capital of Shaanxi Province, Xi’an has been a major beneficiary of central
government initiatives to boost Western China’s economic development through its ‘Go West’ policy, which was launched in 2000.
Xi’an has an outstanding reputation for the quality and extent of
its education and research, the foundations of which were laid in
the middle of the twentieth century when, under China’s planned
economic regime, the city was chosen as one of two locations
(the other being Chongqing) for the development of the country’s
aviation industry. As a result, a number of research establishments
were set up to serve the industry, which in turn were resourced by
graduates from newly-formed academic institutions. This, over time,
has contributed to Xi’an’s current position as one of China’s premier
education hubs.
With its strategic location as the industrial and financial centre of
the Northwest, Xi’an has benefited from China’s renewed efforts
to develop the country’s Western region. Massive infrastructure
investment, and economic incentives that have lured foreign
manufacturers, have provided a catalyst for economic development
in the region and, in particular, the city has made significant efforts to
draw international powerhouses - such as Samsung and Bosch - to
strengthen its science and technology capabilities. In parallel, the
broad presence of multinational corporations (MNCs) and domestic
financial and professional services’ firms has grown over recent
years, strengthening demand for quality office space. As a result,
the majority of higher-quality buildings in the city are close to full
occupancy levels.
Xi’an is also north-west China’s primary retail centre, its catchment
drawing shoppers from Shaanxi and nearby provinces, including
Qinghai, Ningxia and Inner Mongolia, and it is set to continue to
grow on the back of favourable demographics and socio-economic
factors, such as a large well-educated workforce and an expanding
consumer class.
Xi’an City Profile 2014 3
Economic Dashboard
Our China50 Research in 2012 identified Xi’an as a ‘Tier 2 Growth’
city with high potential to attain ‘Tier 1.5’ status. A sustainable trend
of the development and demand for higher-quality real estate assets
is a consistent theme for cities moving from Tier 2 to Tier 1.5 status
and, over the course of the next few years, we expect Xi’an to see a
steady improvement in the quality of its real estate inventory and an
eventual move to the higher status.
Size
Resident Population (million, 2012)
GDP (RMB billion, 2012)
Employment (million, 2011)
Growth
Population (% pa, 2001–2011)
GDP (% , 2011–2012)
Infrastructure
Rail Passengers (million, 2012)
Freight Traffic (million tons, 2012)
Openness
Utilised FDI (US$ billion, 2012)
Exports (US$ billion, 2012)
Wealth
GDP/Capita (RMB, 2012)
Disposable Income per Capita (RMB, 2012)
Education and Labour
Higher Education Institutions (2012)
Total Annual Graduates (000s, 2012)
Unemployment (%, 2012)
Average Wage (RMB, 2012)
We believe that Xi’an’s core competitiveness stems from its strong
cultural identity and its prominence as an education and research
hub. These characteristics have created a powerful and credible
differentiation for the city, and will underpin the ability of Xi’an to
develop a more diverse business mix which will progressively
support the sustained growth of both its economy and
real estate sectors.
8.6
436.9
5.0
1.3
11.8
29.2
449.2
2.5
7.3
51,166
29,982
62
186.4
3.49
45,846
Source: Xi’an Municipal Statistics Bureau
HEILONGJIANG
JILIN
Shenyang
XINJIANG
HEILONGJIANG
LIAONING
HEBEI
Beijing
Tianjin
INNER MONGOLIA
QINGHAI
Shenyang
HEBEI
Qingdao
SHANXI
LIAONING
HEBEI
SHANDONG
INNER MONGOLIA
GANSU
Xi’an
NINGXIA
QINGHAI
Chengdu
Tier 1 Core
Tier 1.5 Transitional
Tier 2 Growth
Tier 1 Core
Tier 3 Emerging
Tier 1.5 Transitional
Tier 2 Growth
Tier 3 Emerging
Chengdu
YUNNAN
HUNAN
GUIZHOU
HUBEI
Chongqing
GUANGXI
ANHUIFUJIANHangzhou
Wuhan
ZHEJIANG
Xiamen
JIANGXI
Dongguan
Dongguan
Shenzhen Taipei
Kong
Hong
Xiamen
TAIWAN
Macau
Shenzhen
Hong Kong
Macau
Wuxi
Suzhou
Shanghai
Ningbo
Wuxi
Suzhou
Shanghai
Taipei
Ningbo
TAIWAN
FUJIAN
GUANGDONG
Guangzhou
HAINAN
Nanning
HAINAN
JIANGSU
Nanjing
Hefei
JIANGXI
GUANGDONG
Changsha
Guangzhou
HUNAN
Nanning
GUIZHOU
GUANGXI
ANHUI Qingdao
Hangzhou
SHANDONG
Wuhan
Zhengzhou ZHEJIANG
Xi’an
Kunming
YUNNAN
SHANXI
HUBEI
HENAN
Changsha
SHAANXI
Kunming
SICHUAN
Nanjing
Jinan
Hefei
HEBEI
Chongqing
GANSU
SICHUAN
TIBET
BeijingZhengzhou
Dalian
JIANGSU
Tianjin
HENAN
SHAANXI
TIBET
JILIN
Jinan
NINGXIA
XINJIANG
Dalian
4 China’s City Winners
Regional Context and Urban
Landscape
North-west hub of China
Xi’an is located in the south-central part of Shaanxi Province,
between the Weihe River in the north and Qinling Mountains in the
south. It lies at the crossroads of several of China’s main inland
arteries, and occupies a key position in the country’s most important
east-west trading route which runs from Lianyungang on the Yellow
Sea to Kazakhstan via Urumqi - a prominent strategic location that
has enabled the city to become the transport hub of north-west China.
Historically, commercial activity in Xi’an was primarily contained
within the old city walls, which were rebuilt during the Ming Dynasty
(1368-1644) on the remains of the Tang Palace walls. The 12
sq km area bounded by the walls has served as the political and
commercial centre of the city, housing the People’s Government of
Shaanxi Province and some one-third of Xi’an’s prime retail space.
Over the past decade, however, limited land availability and the
preservation of historical buildings within the walls have constrained
development and, as a consequence, pushed economic activity and
urban growth to the city’s suburban areas.
At the metropolitan level, we have now begun to see better
integration with neighbouring cities, stimulated by a blueprint for a
Greater Xi’an Metropolitan area approved by the State Council of the
People’s Republic of China in 2010. The planned metropolitan area
is composed of the entire administrative districts of Xi’an, together
with a couple of surrounding second-tier cities such as Weinan and
Xianyang. It is expected to cover about 12,000 sq km and house a
total population of 10 million, and will contain new expressways and
metro lines to facilitate transportation.
The Greater Xi’an and Major Development Zones
Economic & Technological
Development Zone
Xi-Xian New Area
Weinan
Xianyang
Yanliang National Aviation Hi-Tech
Industrial Base
Chanba Ecological District
Hi-Tech Industries
Development Zone
Xi'an
Yulin
Qujiang New District
Yan'an
Tongchuan
Weinan
Xianyang
Xi'an
Baoji
Xi-Xian Ring Road (Proposed)
Second Ring Road
Major Development Zone
Second Outer Ring Road (Proposed)
City Centre
Shangluo
Hanzhong
Ankang
Shaanxi Province
Source: Jones Lang LaSalle Research
Xi’an City Profile 2014 5
In the Greater Xi’an metropolis, beyond the city centre that lies within the old city walls, economic activity is being driven by six major
specialised development zones:
Zone
Description
Key Anchors/Industries
Xi’an Hi-Tech Industries Development Zone
Established in 1991, Xi’an Hi-Tech Zone is
one of three national-level high-tech industry
zones approved by the State Council (the other
two are Beijing Zhongguan Technology Park
and the Suzhou Hi-tech Park). Located in the
south of Greater Xi’an and covering an area
of 107 sq km, the zone features electronic
information, equipment manufacturing, biological
pharmaceutical and automobile industries.
MNCs such as Samsung, Schneider Electric,
BYD Auto, Micron, Applied Materials, Honeywell,
Intel, IR Semiconductor, Infineon and NEC have
all set up production facilities or R&D centres in
the zone.
Xi’an Economic and Technological
Development Zone
Originally established in September 1993,
the State Council classified this zone as a
national-level economic and technological
development zone in February 2000. The zone
has developed facilities catering in particular for
the manufacturing side of mechanical, electronic,
light industrial and new materials industries,
and by end 2015, it is expected the zone to
achieve industrial output of RMB 450 billion and
industrial added-value of RMB 150 billion.
To date, the zone has attracted more than 3,600
companies, including around 30 ‘Fortune Global
500’ enterprises such as BP and Siemens, many
of which are using it as a production base.
Xi’an Yanliang National Aviation Hi-Tech
Industrial Base (CAIB – Civil Aviation
Industrial Base)
Set up in 2004 by a State Development
and Reform Commission, CAIB is the only
development zone of its kind in China, integrating
aviation industry R&D, training of aviation-related
talent, aviation equipment manufacturing and
component processing. With more than 300
enterprises, the zone is the largest aviation R&D,
training and production base in Asia.
CAIB has attracted investment in its aviation and
supporting sectors, such as the RMB 5 billion
fund set up by Rose Rock, the Xi’an National
Aviation Hi-tech Industrial Base and the Xi’an
National Aeronautics Industry Fund Investment
Management Company, and the RMB 1.2 billion
project jointly developed by the Sichuan Hongtai
Industrial Group and the Xi’an Rongda Aviation
Company.
Xi’an Chanba Ecological District (CBE)
CBE was established in September 2004. It is
located in the north-east urban submarket of
Xi’an and covers 129 sq km. It is mainly focused
on improving the ecology along the Chan and
Ba rivers through various ecological and green
infrastructure and constructure programmes.
CBE has concentrated on developing the
modern services sectors, including finance,
tourism, conferences and exhibitions, culture and
education.
Qujiang New District
Qujiang New District is located in the south-east
of Greater Xi’an. It covers a total area of 150 sq
km and has some 41 sq km at its core.
The submarket is mainly focused on the culture
and tourism sectors, and aims to have 2,000
cultural sector enterprises and an annual output
of RMB 30 billion by end 2015.
Xi-Xian New Area
Approved by the State Council and established in
February 2010, Xi-Xian New Area covers 882 sq
km and is an important component in the Greater
Xi’an metropolis, located at the centre of the
eastern section of the Eurasian Land Bridge and
therefore closely linked with other Chinese cities.
The zone is planned to comprise 10 industrial
parks, such as the Airport Comprehensive
Bonded Zone and Jinghe Trade and Logistics
Park.
(Hi-Tech Zone)
6 China’s City Winners
Average Salaries in Key Cities, 2012
Best-in-class universities and a large pool of educated workers
Higher education in Xi’an has and continues to provide a solid
foundation for the development of the city’s high-tech and modern
services sectors, with a number of its universities recognised
as China’s best. Three universities in the city, namely the Xi’an
Jiaotong University, the Northwestern Polytechnical University and
the Northwest Agriculture and Forestry University, are on the list of
Project 985, which is a national-level scheme that was initiated in
1988 to fund and cultivate the country’s top institutions into world-class
universities; the project has 39 sponsored universities which include,
among others, Peking University and Tsinghua University. In addition,
seven universities in Xi’an are part of Project 211, which aims to raise
100 of the country’s universities to world-class status in the twentyfirst century. In terms of the number of universities in Project 985 and
Project 211, Xi’an ranks as the top city in Western China.
Graduates of Higher Education Institutes, 2012
250
(’000s)
200
150
100
50
0
Beijing
Shanghai
Chengdu
Undergraduate Degrees
Xi'an
Chongqing
Graduate Degrees
Source: CEIC
Number of Colleges and
Universities
Higher Education Institutions, 2012
100
90
80
70
60
50
40
30
20
10
0
91
67
62
67
52
Beijing
Shanghai
Source: Municipal Statistics Bureaus
Chengdu
Xi'an
Chongqing
70,000
60,000
RMB per annum
Core Strengths
50,000
40,000
30,000
20,000
10,000
0
Source: CEIC
Beijing
Shanghai Chengdu
Xi'an
Chongqing
As the third largest education base in China, universities and
colleges in Xi’an annually produce over 186,000 graduates from
colleges and universities (ranking only behind Beijing and Wuhan),
while its 62 institutions of higher learning are only second in number
to Chongqing in the Western China region. In terms of academic
qualifications, 22% of Xi’an inhabitants have a college degree or
higher, which, nationally, places the city only behind Beijing (32%)
and Wuhan (25%), and on the same level as Shanghai. Meanwhile,
the percentage of population with a higher education tops other
cities in Western China, and is significantly higher than that of
Chengdu (17%) and Chongqing (9%).
A young workforce
The working-age (15-64) population in Xi’an stands at around 79%,
the same percentage as Chengdu but significantly higher than that
of Chongqing (71%). The city’s workforce is relatively youthful, with
around 45% of the total population aged 15-39, higher than that in
either Chengdu (43%) or Chongqing (34%).
Government investment in science and education
As at end 2011, there were close to 80 scientific research institutes
represented in Xi’an, employing more than 35,000 scientists and
technical experts; a notable example is the Chinese Academy of
Sciences which operates one of its 12 branch offices in the city.
Furthermore, many academic institutions in the city have a long
history of strategic partnerships with China’s national defence and
aviation industries, such as the Xi’an Yanliang National Aviation
Hi-Tech Industrial Base (CAIB) which hosts two national engineering
research centres that are linked to the Northwest University and
Xi’an Jiaotong University. Another example is Northwestern
Polytechnical University’s cooperation with the Commercial Aircraft
Corporation of China Ltd (COMAC) in using laser solid forming
technology as a solution to manufacturing titanium alloy parts for the
C919 – the first commercial aircraft designed in China.
Xi’an City Profile 2014 7
Economic Dynamics
Strength in natural resources, heavy industry and
manufacturing
Shaanxi Province is rich in natural resources, such as coal and oil,
which are vital ingredients for a range of heavy industries in Xi’an
that include steel production, non-ferrous metals, non-metallic
minerals, fuel processing, power production and chemicals, and
which accounted for about 40% of the city’s total GDP in 2012.
The city has retained a historical role as one of the country’s
military industrial centres and, as such, the central government has
established a number of associated state-owned factories, such as
Xi’an Coal Mining Machinery Company and Xi’an Steel.
The five pillar industries in Xi’an are high-technology, equipment
manufacturing, tourism, modern services and culture; the value
added by these dominant industries accounted for about 51% of
Xi’an’s GDP in 2012, increasing from 40.8% in 2005. Of these
industries, the modern services sector contributed around one-third
of the city’s GDP in 2012.
In its efforts to diversify the city’s economy beyond heavy industry,
Xi’an has been encouraging both the development of higher valueadded products, such as the manufacture of LEDs and photovoltaic
materials, and the expansion of IT outsourcing. In 2012, for example,
Xi’an attracted the largest investment by a foreign investor in
Western China with Samsung’s pledge to invest US$7 billion in the
first phase of a facility to make NAND flash memory drives.
Thriving tourism and cultural industries
As one of the Four Great Ancient Capitals of China and home to
the Terracotta Warriors and Horses, Xi’an is one of China’s most
popular tourist destinations and, as such, the tourism industry has
been one of the strongest growth areas propelling the development
of the city’s tertiary sector. Xi’an has had a continuing programme
of investment in tourism, and this has included the accelerated
expansion of cultural amenities (e.g. museums, hotels and related
infrastructures). As a result, the number of tourist arrivals has grown
at an annual rate of over 20% since 2008.
8 China’s City Winners
On a municipal level, Xi’an currently offers a range of generous
incentives to various enterprises - including those in modern
services, financial services and logistics – and, in addition, each
development zone provides priority support to its favoured industries.
For example, Qujiang New District gives cultural corporations that
meet its requirements a range of policy incentives, including income
tax reductions. Elsewhere, Chanba Ecological District, in aiming
to cultivate a financial and business zone, is providing preferential
policies to companies in the financial services, modern services and
environmental protection sectors.
GDP in Key Cities, 2012
2,500
2,000
(RMB billion)
Business-friendly policies
Xi’an enjoys preferential policies from both central and local
government in regards to stimulating foreign investment and
nurturing key growth industries, such as high-tech outsourcing and
modern services. Various policies - including income tax reductions
and exemptions, input (e.g. water, electricity) subsidies, and landuse fee waivers - are being used to encourage foreign investment as
well as domestic high-value-added enterprises. For example, in the
Hi-Tech Zone the tax rate has been cut to 15% for foreign-invested
high-tech companies and to 24% for manufacturing companies who
have been operating for more than 10 years.
These policies have successfully stimulated economic growth, with
the actual utilised FDI amounting to US$2.5 billion in 2012 in Xi’an,
up 23.6% year-on-year. As of end 2012, there were some 3,000
projects in the city involving investment by foreign MNCs - among
these are 136 branches set up by 85 ‘Fortune Global 500’ companies.
These include, many high-tech heavyweights, such as IBM, Intel and
Huawei, and notable newcomers like Samsung - whose US$ 7 billion
investment, as previously mentioned, shows that major companies are
continuing to invest heavily in the city.
17.7%
15.5%
17.3%
17.9%
20%
16%
13.2%
1,500
12%
1,000
8%
500
4%
0
Beijing
Shanghai Chengdu
2012 GDP (LHS)
Xi'an
Chongqing
0%
CAGR (2000-2012, RHS)
Source: CEIC; Municipal Statistics Bureaus
Freight Traffic, 2012
30%
1,200
1,101
1,000
Millons of Tons
Policies and investment in Guanzhong-Tianshui Economic
Zone to drive future growth
Approved by the State Council in 2009, the Guanzhong-Tianshui
Economic Zone, with an area of 79,800 sq km, covers Xi’an and
other cities such as Tongchuan, Baoji and Xianyang in Shaanxi
Province and Tianshui in Gansu. Under the current plan for the
zone, Xi’an will specialise in high-value-added industries such as
aeronautics and aviation, equipment manufacturing, culture, tourism
and modern services, while other cities will focus on sectors such
as food processing, electronic appliances and modern agriculture.
The plan also includes major investments in infrastructure, including
railways and expressways which, in its capacity as the official centre
for the zone, will enhance accessibility to and from Xi’an.
944
800
20%
15%
600
400
200
0
396
10%
449
5%
286
Beijing
Shanghai Chengdu
Freight Traffic (LHS)
Source: CEIC
25%
Xi'an
Chongqing
Y-o-Y Growth (RHS)
0%
Xi’an City Profile 2014 9
Xi’an Demographics, 2011
Demographics
As at end 2012, the total population of Xi’an was approximately
8.5 million, making it the most populous city in Shaanxi Province
and third (behind Chongqing and Chengdu) among the major cities
in Western China. Around 80% of the population live in the city’s
nine urban districts, the most populated of which are Yanta and
Chang’an while Beilin has the highest density.
Population of Key Cities, 2012
Core
Population (million)
30
District
Area
(sq km)
Population
Density
(persons/sq km)
Xincheng
30
592,300
19,743
Beilin
24
618,700
25,779
Lianhu
43
701,300
16,309
Yanta
149
1,114,800
7,952
Weiyang
262
811,400
3,097
Baqiao
325
598,700
1,842
25
Chang'an
1,590
1,090,100
686
20
Yanliang
244
280,100
1,148
Lintong
915
659,800
721
Lantian
2,008
516,500
257
Zhouzhi
2,949
565,900
192
Huxian
1,282
558,500
436
Gaoling
287
335,300
1,168
15
10
Suburban/
Periphery
5
0
Beijing
Shanghai Chengdu
Xi'an
Chongqing Wuhan
Source: Xi’an Municipal Statistics Bureau
Source: Municipal Statistics Bureaus
Administrative Districts in Xi’an
Yanliang
Lianhu
Xincheng
Gaoling
Beilin
Lintong
Weiyang
Baqiao
Yanta
Lantian
Zhouzhi
Source: Jones Lang LaSalle Research
Huxian
Chang’an
10 China’s City Winners
Planning and Infrastructure
Largest air hub in north-west China
Positioned as the aviation hub of the region, Xi’an Xianyang
International Airport - which is located in Xianyang City, some 41 km
north-west of Xi’an city centre - has undergone a rapid expansion,
making it the largest and busiest airport in north-west China. The
newly-completed Terminal 3 and the second runway have increased
the airport’s capacity to more than 33 million passengers per year.
In 2012, the airport handled 23.4 million passengers, making it
the eighth busiest airport nationwide. It already has flight routes to
major destinations such as Seoul, Tokyo, Singapore, London, Paris,
Frankfurt, Los Angeles, Bangkok and Kuala Lumpur, and in 2013 the
airport opened additional routes to Helsinki and Moscow, reinforcing
its position as the region’s air hub. By 2015, the airport is expected
to link to more than 90 cities globally via some 200 routes, and
passenger throughput is projected to exceed 30 million.
Enhanced railway facilities and expressway links
Xi’an is the largest railway hub in north-west China, linked to the
national high-speed railway network through the Xi’an-Zhengzhou
High-Speed Railway which began operations in 2010. Further highspeed railway lines, such as the Xi’an-Chengdu and Xi’an-Wuhan
lines, are under construction or in planning.
Xi’an’s government has also invested in new transportation facilities,
including a new railway station and further extensions to the existing
railway network. On completion, the new Xi’an North Railway Station
will be the largest railway station in Asia. It is being developed in two
phases, and will have a final total GFA of 171,000 sq m. Phase one,
containing 15 platforms, started operations in January 2011. When
Phase Two is completed in 2018, the station and its 34 platforms will
have an annual throughput of 82 million passengers.
China’s High-Speed Railway
Beijing
90
80
70
60
50
40
30
20
10
0
Lanzhou
u
zh
o
ing
ng
gq
Ha
’an
Xi
on
Ku
Ch
en
nm
ing
u
zh
gd
Sh
en
o)
en
qia
ng
(H
o
Guangzhou
Shenzhen
an
Source: Civil Aviation Administration of China
Qingdao
Lianyungang
Shanghai
Wuhan
gh
ai
Ch
u
on
ho
ud
Xi’an Zhengzhou
Sh
Sh
an
gh
ai
(P
gz
ijin
an
Gu
Be
g)
Chengdu
g
Passengers (million)
China’s Busiest Airports – Total Passengers, 2012
Source: Jones Lang LaSalle Research
Xi’an-Zhengzhou
Xi’an-Chengdu
Xi’an-Wuhan
Longhai Railway (Freight rail)
High-speed railway system
Xi’an City Profile 2014 11
By road, Xi’an is linked to other provincial cities through nine national
expressways, an arterial framework that has enabled the city to
form an established expressway system of more than 2,800 km
that connects the whole of Shaanxi Province and its surrounding
provinces. There are six national highway routes passing through
this city, such as China national highway 211 (G211) running from
Yinchuan in Ningxia to Xi’an in Shaanxi, and China national highway
210 (G210) from Baotou, Inner Mongolia to Nanning, Guangxi
Province. Within the metropolitan area, the Outer Ring Road, a
new highway to the Xi’an Xianyang International Airport, the 2nd
Ring Road and the 3rd Ring Road are now in full operation, and the
city has also completed and opened numerous other highways to
districts and counties under its jurisdiction.
Xi’an is continuing to rapidly develop the expressway system, with
current major roads under construction including the Second Outer
Ring Road and the expanded national highway 321 (G321) which
runs from Lianyugang in Jiangsu Province to Khorgas in Xinjiang
Uyghur Autonomous Region. The improved highway system has,
as a result, enhanced the city’s position as the centre for the
Guangzhong-Tianshui Economic Zone, even to the extent of it now
being a major gateway to Eurasian markets.
12 China’s City Winners
Ambitious metro system expansion
There are two operational metro lines in Xi’an: Metro Line 2, with
a total length of 20.5 km, which came into service in 2011, and
Metro Line 1 (25.4 km), completed in 2013. The Xi’an Metro is
the only metro system in north-west China and has an average
daily passenger flow of approximately 500,000. In expanding the
system, an ambitious metro plan is underway with additional lines
– namely Lines 3 and 4 and the Line 2 extension – currently under
construction. Together with the planned Lines 5, 6 and 11, the Xi’an
Metro will eventually have seven lines with a total length of 221 km
by end 2018. In the longer term, by 2030, the city will have 15 metro
lines with a total length of about 600 km.
The Xi’an Metro – Operatonal and Planned Lines
Line 15
Line 11
Line 2
Line 3
Line 14
Line 10
Line 12
Line 9
Line 1
Line 1
Line 6
Line 8
Line 3
Line 5
Line 5
Line 12
Line 7
Line 9
Line 4
Line 10
Line 6
Line 13
Line 8
Line 2
In operation
Planned
Source: Jones Lang LaSalle Research
Xi’an City Profile 2014 13
Major Employers
Major Investments
China National Software & Service/Huawei
Samsung Electronics
China National Software & Service Co Ltd and Huawei have set up a joint
venture in the Hi-Tech Zone. The company has over 15,000 employees
(2012), and its annual revenue is forecast to reach RMB 3.6 billion
(US$590 million) in 2015.
In the first phase of an investment project that will total US$7 billion,
South Korea’s Samsung Electronics is setting up a flash memory R&D
and manufacturing facility for Xi’an in what is the largest foreign invested
high-tech industry project since the implementation of the central
government’s ‘Reform and Opening Up’ policy. Phase 1 of the project
became operational in 2013.
Shaanxi Automobile Group
Headquartered in Xi’an, Shaanxi Automobile Group was established in
1968 and has now grown into a company that has over 35,000 employees
(2012) and 20 subsidiaries, which include the Xi’an Cummins Engine
Company.
Xi’an-Janssen Pharmaceutical
Xi’an-Janssen is a joint venture that was set up in 1985 by the Belgiumbased Janssen Pharmaceutical Company, the Shaanxi Pharmaceutical
Group, the Shaanxi Hanjiang Pharmaceutical Company, the China
National Pharmaceutical Industry Corporation and Sino Pharm. It is now a
Johnson & Johnson company and the largest joint venture pharmaceutical
company in China. Headquartered in Beijing and with over 3,000
employees in China, the company has a manufacturing base in Xi’an.
BYD Xi’an Auto
The first BYD factory, with an annual production capacity of 100,000
automobiles, was built in the Hi-Tech Zone in 2003 and the company’s
second Xi’an facility, with an annual output of 400,000 units, was
completed in 2013. The two facilities have a combined annual capacity
of 700,000 automobiles, projected total annual sales revenue of RMB 35
billion and a workforce of 70,000 employees (2013).
Minsheng Department Store
The Minsheng Department Store was established in 1959 and became
a public company in January 1994 - one of the earliest companies to
become listed in Xi’an and north-west China. The company operates
department stores and supermarkets, employs over 5,000 (at end 2013),
has total assets of RMB 1.1 billion and annual sales revenue of more than
RMB 2 billion.
Schneider Electric
In November 2011, Schneider Electric signed an agreement with the Xi’an
Hi-Tech Zone which signalled an investment by the company of US$200
million (RMB 1.22 billion) in the development of several projects, including
its Innovative Software R&D Centre and the Industry Applied Equipment
Centre, as well as its Western China headquarters. The R&D Centre and
factories were completed at the end of October and November 2013,
respectively.
Schlumberger
SCP Oilfield Services, a joint venture between Schlumberger and
CoPower, signed an agreement with the Hi-Tech Zone in January
2013 that will see the company establish its headquarters as well as
a production dispatching centre, a financial settlement centre and a
technology R&D centre within the zone. The investment will total RMB
630 million (US$102.9 million).
Rose Rock Group
In November 2012, the US-based Rose Rock Group established a RMB
5 billion fund with the Xi’an National Aviation Hi-Tech Industrial Base
and the Xi’an National Aviation Industry Fund Investment Management
Company to jointly develop a 20 sq km international aviation industrial city.
Global Logistic Properties (GLP)
A joint venture set up by GLP and the Xi’an Hi-Tech Zone, which involves
a total investment of RMB 2 billion, is developing the GLP I-Park. Located
inside the R&D area of Xi’an Software New City, the park will have a site
area of 223 mu* (148,667 sq m) and a GFA of 550,000 sq m.
Ginwa Enterprise Group
IKEA
Founded in 1991, Ginwa Enterprise Group has been developed into
a large conglomerate with diverse interests in real estate investment,
pharmaceutical manufacturing, department stores and hotels. By end
2013, the group owned two listed companies employed more than 20,000
staffs, and had total assets valued at about RMB 30 billion.
Sweden’s IKEA group has confirmed that it will build its first outlet and
distribution services centre in north-west China in Fengdong New Town in
the Xi-Xian New Area, an investment of €100 million (RMB 805.8 million).
Suning Group
In August 2012, Suning Group purchased a circa 8,500 sq m (site area)
plot in the City Centre for RMB 19.59 million per mu* (accommodation
value) and is investing a total of RMB 800 million in its first commercial
real estate development in north-west China. The scheme is scheduled to
be completed in early 2014.
Goodman
Goodman will develop a modern e-commerce industrial park in the Xi’an
Economic and Technological Development Zone. With a total investment
of US$60 million, the project will have a GFA of about 100,000 sq m and
will start operation in 2015.
* 1 mu = 0.06667 hectare
14 China’s City Winners
Real Estate Overview
Real Estate Dashboard, Q4 2013
Market Size
Total Office Stock (000s sq m)
2,024
Grade A (000s sq m)
603
Grade B (000s sq m)
1,421
Total Retail Stock (000s sq m)
3,211
High-End Residential (Units)
60,000
Number of Hotels (Five-star)
9
Market Activity
Office Vacancy Grade A (%)
22.0
Retail Vacancy (%)
4.2
Benchmark Values
Grade A Office Rents (RMB/sq m/month)
106
Retail Rents (RMB/sq m/month)
202
High-End Residential Capital Values (RMB/sq m)
10,600
Grade A Office Indicative Yields (%)
8.0
Source: Jones Lang LaSalle Research
Key Players
Key Transactions
Investors
Investors
Residential
China Overseas, Vanke, Ziwei, Gemdale, Kingfar
Offices
Greenland, CapitaMalls Asia, Maike Holding,
Linnking Group
Logistics
GLP, China Merchants Logistics, Mapletree,
Shaanxi Shang Chu Wu Liu
Hotels
Shangri-La, Sheraton, Crowne Plaza,
Starwood, Sofitel
Retail
Century Ginwa, Wanda, Intime, Mapletree, Greenland
Occupiers
China Electronics Corporation purchased Taihua•Jinmao International
Block 4 in the High-Tech Zone
China Minsheng Bank purchased Taihua•Jinmao International Block 5 in
the High-Tech Zone
SPD Bank purchased a 15,000 sq m property at Greenland Zhihai Plaza
in the High-Tech Zone
Chang’an Bank purchased a 35,000 sq m property at Langchen Plaza in
the High-Tech Zone
Western Investment Group purchased a 1,400 sq m office at Chang’an
Metropolis Center in the City Centre
Retail
LV, H&M, Zara, Gap, C&A, Ole’
Service Firms
Jones Lang LaSalle, PwC
Anbang Insurance bought 1,200 sq m office in the High-Tech International
Business Centre in the Hi-Tech Zone
Consulates
Thailand, South Korea
Occupiers
Source: Jones Lang LaSalle Research
HP leased about 1,000 sq m in Linnking International Building in Q1 2012
PwC leased 2,300 sq m in Chang'an Metropolis center in Q1 2012
Canon leased 700 sq m in Chang'an Metropolis center in Q2 2012
Bayer leased 900 sq m in Chang'an Metropolis center in Q2 2012
Source: Jones Lang LaSalle Research
Xi’an City Profile 2014 15
Jones Lang LaSalle’s View
Offices
Retail
As with other major cities in the region, Xi’an’s occupier market
is largely dominated by local players, with large state-owned
enterprises (SOEs) as well as domestic companies being the
key drivers of demand in the quality office market. As most
MNCs within the city are still in the early stages of their business
operations, they are, so far, only playing a minor role in the city’s
occupier market, with average space requirements of about 200
sq m, which is lower than its counterparts such as Chengdu
(c. 500 sq m) and Chongqing (c. 400 sq m).
Sustained by shoppers from not only Shaanxi but also other
provinces in north-west China, such as Qinghai, Ningxia, Gansu
and Inner Mongolia, Xi’an is witnessing a booming retail market
that has led to the city becoming the commercial centre of the
region.
Total occupied institutional grade stock (Grade A and B) relative
to its service sector output remains below other Tier 1.5 and
Tier 2 cities. However, given the industry dynamics in Xi’an, we
do not think that the low ratio necessarily suggests a massive
undersupply of office stock, as a significant volume of demand
from the tertiary sector is being met by office space available in
the city’s established research and science parks.
Even so, we believe the market contains a large potential pool of
demand for upgrades. Similar to their peers in other cities across
China, we expect occupiers in Xi’an to increasingly demand
higher-quality office space, and this is being made evident by
a fairly strong take-up of higher specification buildings in prime
locations by MNCs and domestic companies.
As a result, we expect that the prevailing divergence in real
estate activity between prime and secondary locations will persist.
Despite the apparent high vacancy rates in the overall market,
the availability of high-quality offices in prime locations, such as
the City Centre and northern end of the Hi-Tech Zone, remains
limited. On the other hand, the high level of supply in secondary
locations will continue to put pressure on the rental and price
levels of buildings in those areas.
Although Xi’an is home to a number of international luxury brands,
such as Louis Vuitton, Gucci and Prada, the depth and diversity
of brands in the city has thus far lagged its Western region
peers, namely Chengdu and Chongqing. This, combined with
increasingly favourable demographics, has made Xi’an a ripe and
attractive destination for retailer expansion in China.
Local players, such as Century Ginwa and Minsheng Department
Store, have led and continue to dominate the market. However,
there are now a number of projects in the supply pipeline being
developed by reputable domestic shopping-mall developers, such
as Wanda, China Resources Land and Chia Tai Group, each of
which are introducing new elements such as ‘experience-led retail’
to the city.
Like many other cities in China, Xi’an is seeing growing volumes
of new supply, with total stock rising from 3.2 million sq m at end
2013 to a projected 5.8 million sq m in 2016. The City Centre
and Hi-Tech Zone are currently the most established high-end
retail clusters in Xi’an, with most high-end department stores and
shopping malls concentrated in these submarkets. However,
with an expanding metro system and further improvements in
transportation across the city, many of the new districts, such as
City North and the southern part of the Hi-Tech Zone, have the
potential to attract prime retail precincts.
16 China’s City Winners
Industrial
Residential
Traditionally, Xi’an has relied on heavy industry, particularly
its automobile and aviation-equipment manufacturing sectors,
through an economic development programme strategically
cultivated by the central government. However, the strong supply
of skilled labour and active support from the Xi’an government has
encouraged the broadening of the industrial base, and the growth
of the high-tech industry in particular over the recent decade. As
a result, a number of technology giants such as IBM, Intel and
Huawei have established large-scale manufacturing or R&D bases
in the city and, with robust demand and limited supply, the majority
of the buildings in business parks are now at full occupancy.
As the established economic and education focal point of northwest China, Xi’an is experiencing buoyant demand for high-end
residences from a growing volume of affluent inhabitants within
the region. At the same time, the city’s expanding white-collar
population - a result of its flourishing high-tech and financial
services industries - is also fueling a healthy demand for housing.
We expect that these two forces will continue to sustain the highend residential market in Xi’an.
Also under provisioned within the city is international logistics
(warehouse) stock. Driven by an ever stronger manufacturing
production base, an established transportation network and robust
domestic consumption, there is heavy demand for a greater
volume of high-quality logistics warehousing.
Given the Xi’an government’s more accommodating view on
the industrial sector, we therefore expect a significant increase
in activities in the business park and logistics sectors. The city
government has realised that a shortage of high-quality space in
these sectors will hinder the long-term development of the city’s
economy, and therefore has long-term plans to expand the scale
of the existing Hi-Tech Zone, Xi’an Economic and Technological
Development Zone and Xi’an International Trade and
Logistics Park.
Furthermore, the government’s economic development direction,
together with improvements in the transport network within the
city, will see the distribution of high-end residential clusters
expand from the existing City Centre, Hi-Tech Zone and Qujiang
to City North and City East.
We expect the average quality of high-end residential housing
in Xi’an to be enhanced with the entry of prominent developers
- particularly domestic giants such as Greenland Group, China
Overseas and China Resources Land - who will introduce
fresher elements and concepts essential to the high-end
residential market.
Hotels
As one of China’s earliest well-developed tourism cities, Xi’an has
the highest presence of international hotel brands within northwest China, having attracted a number of renowned operators
such as Hilton, Sofitel and Sheraton to provide world-class
hospitality services.
The city expects to see another 2,700 international branded rooms
added to its hotel supply over the next three years, increasing
by 20% compared with end-2013 stock levels. Although this
expansion will put pressure on hotel room occupancy rates in
the short term, the rapid development of corporate business, the
MICE (Meeting, Incentive, Conference and Exhibition) sector and
domestic tourism will generate additional demand, limiting any
sudden fall in room rates.
Xi’an City Profile 2014 17
Offices
Total quality office stock in Xi’an was 2 million sq m at end 2013,
composed of 0.6 million sq m of Grade A and 1.4 million sq m of
Grade B space. There are three major office submarkets in the city –
the City Centre, the Hi-Tech Zone and City North – and within these
areas it is local players that have developed most of the existing
office buildings, with only a few office schemes involving wider
domestic and foreign concerns. However, the city’s office market is
undergoing significant change, with many national and international
developers, such as Greenland, China Railway Construction and
CapitaMalls Asia, having office projects scheduled to be completed
in 2014-2018 that will help to enhance the overall quality and
specification of commercial space within the city.
From an occupier perspective, the Xi’an office market is dominated
by domestic companies, which account for around 85% of the
occupied space. Foreign MNCs, who tend to have higher technical
requirements for office space, are primarily clustered in a handful of
Grade A office buildings, such as HSBC and Bank of East Asia in
Chang’an Metropolis Center in the City Centre; Texas Instruments
and Rohm Semiconductor in the High-tech International Business
Centre; and Davis Langdon and Jones Lang LaSalle in CapitaMall
Office in the Hi-Tech Zone.
As at end 2013, the overall office vacancy rate for Xi’an stood
at around 21%; Grade A vacancy at 22% and Grade B at 20%.
Sustained by strong demand from foreign MNCs and local
enterprises, most prime office buildings in the well-established office
clusters, such as the City Centre and the northern part of Hi-Tech
Zone, have achieved full occupancy levels. Meanwhile, most of the
city’s vacant office space can be found in new projects in emerging
areas such as the southern part of the Hi-Tech Zone and the
northern part of the City North. Nevertheless, it is expected that the
high vacancy levels in these emerging office clusters will be relieved
once the city’s long-term economic development direction takes
effect. Furthermore, the improvement in infrastructure - such as in
the metro and expressway systems - together with the relocation of
the Xi’an Municipal Government headquarters to City North, will also
trigger other office occupiers to relocate to these new clusters.
Submarket
Description
City Centre
A traditional submarket with comprehensive amenities
and good accessibility, this is the area most preferred by
MNCs. Notable office developments include Chang’an
Metropolis Center (Grade A) and New Times Square
(Grade B). Future office supply is limited in the submarket
due to insufficient land supply.
Hi-Tech
Zone
The northern part of the Hi-Tech Zone is an established
office cluster. High-quality office buildings are mainly
along Tangyan Road and Keji Road with notable office
developments including the High-tech International
Business Centre (Grade A), Linnking Plaza (Grade A)
and CAAC Tangyan International Center (Grade B).
The southern part of the Hi-Tech Zone is an emerging
cluster with healthy levels of future supply. A growing
number of SOEs and MNCs are being attracted to this
submarket.
City North
City North is another emerging office submarket, which
consists of the existing office buildings and upcoming
office projects located along Weiyang Road. Major
office buildings include Changqing Technology Building
(Grade A) and Jingfa Plaza (Grade B). Stimulated by
the relocation of the Xi’an Municipal Government, office
developments in City North have been accelerated.
The new developments are mainly concentrated in the
northern section of Weiyang Road.
Looking ahead, the Hi-Tech Zone and the City North submarkets,
which have the highest concentrations of existing and future supply,
will develop into the major office clusters in Xi’an. The maturing
business environment, improving infrastructure and accessibility
will help to attract more tenants to these submarkets, as too will the
growing industrial concentration in the Hi-Tech Zone which
will generate further demand for office space. Moreover,
continued subsidies and tax waivers from the local government
will further entice greater numbers of companies to move to these
emerging clusters.
18 China’s City Winners
Grade A Office Stock and Vacancy, 2012 and 2013
8.0
70%
7.0
60%
Million sq m
6.0
50%
5.0
40%
4.0
30%
3.0
20%
2.0
10%
1.0
0.0
Beijing Shanghai Chengdu Xi'an
Chongqing Wuhan
0%
Total Stock 2012
New Supply 2013 Vacancy Movement
Vacancy Rate 2012
Vacancy Rate 2013
Source: Jones Lang LaSalle Research
Grade A Office Stock, 2010-2016 F
14.0
Million sq m
12.0
10.0
8.0
6.0
4.0
2.0
0.0
Beijing
Shanghai Chengdu
As of 2010
2011-2013
Xi'an
Chongqing Wuhan
2014-2016 Forecast
Source: Jones Lang LaSalle Research
Million sq m
Xi’an Office Stock, 2010-2016 F
2.0
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
City Center City Center City North City North High-Tech High-Tech
Grade A Grade B Grade A Grade B Grade A Grade B
As of 2010
2011-2013
Source: Jones Lang LaSalle Research
2014-2016 Forecast
Xi’an City Profile 2014 19
As at end 2013, Xi’an’s volume of prime retail space stood at some
3.2 million sq m – 1.5 million sq m in shopping malls and 1.7 million
sq m in department stores. The City Centre is the most established
prime retail submarket in Xi’an, with its wide selection of retail
centres and department stores drawing shoppers from all over the
city as well as from the wider Shaanxi Province. At the same time,
tourist attractions within the City Centre, such as the Bell Tower, the
Drum Tower and Muslim Street, have all helped to bring plentiful
number of visitors to the submarket. Zhongda International Mall in
the City Centre is Xi’an’s most high-end shopping mall, home to
luxury brands such as Louis Vuitton, Prada and Versace. The other
major retail submarkets are Xiaozhai and the Hi-Tech Zone, where
many mid- to high-end department stores and shopping malls can
be found; notable examples include CapitaMall-Xindicheng and
Century Ginwa-High-tech Store. In contrast to the City Centre, these
submarkets are mainly supported by their local communities.
Prime Retail Stock and Vacancy, 2012 and 2013
Million sq m
Retail
10
20%
8
16%
6
12%
4
8%
2
4%
0
Beijing Shanghai Chongqing Wuhan Chengdu
Total stock 2012
Vacancy Rate 2012
New Supply 2013
0%
Vacancy Movement
Vacancy Rate 2013
Source: Jones Lang LaSalle Research
Xi'an
20 China’s City Winners
These favourable fundamentals and greater supply options have
encouraged retailers to expand in the market. In particular, fastfashion brands such as Gap, H&M and Uniqlo have already opened
stores in the city’s new shopping malls and department stores, and
the rising number of new set-up requirements is a major demand
source for prime retail space. At the luxury end of the market,
brands such as Lanvin, Tiffany & Co. and Roger Vivier have recently
entered Xi’an.
Total prime retail stock is forecast to almost double in the next
three years, reaching 5.8 million sq m by end 2016, while malls are
expected to replace department stores as the key component in the
city’s prime retail market. Experienced shopping mall developers,
such as China Resources Land, Wanda Group and CapitaMalls
Asia, will continue to increase their investment in the city on the
back of the forecast for fast-growing momentum in Western China’s
regional economy.
Million sq m
Prime Retail Stock, 2010-2016 F
16
14
12
10
8
6
4
2
0
Beijing
Shanghai Chongqing Wuhan
As of 2010
2011-2013
Chengdu
Xi'an
2014-2016 Forecast
Source: Jones Lang LaSalle Research
Xi’an Prime Retail Stock, 2012-2016 F
7
6
Million sq m
After experiencing five years of rapid growth (15% CAGR), the
city annual retail sales reached RMB 223.6 billion in 2012, ranking
only behind Chengdu and Chongqing in Western China. This rapid
growth has been largely underpinned by an increase in household
incomes and the burgeoning tourism sector - per capita disposable
real income for Xi’an has maintained double-digit annual growth
since 2008, almost doubling from RMB 15,207 in 2008 to RMB
29,982 in 2012.
5
4
3
2
1
0
2012
2013
Department Store
2014F
Shopping Mall
Source: Jones Lang LaSalle Research
2015F
2016F
Xi’an City Profile 2014 21
Residential
Local and other domestic developers dominate the Xi’an highend residential market, with China Overseas, Greenland and
Gaoke Group representing the leading developers in the city.
Foreign developers are not involved in any high-end residential
schemes, however a few do have commodity housing projects in
the city; notable examples include Hutchison Whampoa, which has
developed Yicui Garden in the Hi-Tech Zone, and Henderson Land
and Surbana Land, which have jointly developed La Botanica in
Chanba Ecological District.
At end 2013, there were about 60,000 high-end residential units in
Xi’an, primarily located in the City Centre, Hi-Tech Zone and Qujiang
submarkets.
• The City Centre is the oldest high-end residential submarket, its
projects being originally initiated by local and domestic developers
in 2003. Its established business environment, together with good
accessibility, means that it has traditionally been regarded as a
high-end residential cluster and, at end 2013, the total stock of
high-end units was about 15,200. Among these, properties include
China Overseas’ Classic Palais and Shanghai Eastern Airlines
Real Estate Investment’s Gongyuan Tianxia.
• Qujiang is currently the largest high-end residential submarket in
the city with a total stock of around 22,000 units (end 2013). The
development of this submarket began in 2003 when Qujiang was
designated as one of the two earliest National Cultural Industry
Demonstration Bases by the central government. Within Qujiang,
China Overseas’ Gemlacus and Gemdale’s Lake City are the most
expensive luxury residential estates to have been developed in
the city thus far.
• The Hi-Tech Zone houses another important cluster of high-end
residential projects. An influx of MNCs from the high-tech sector
in the 2000s triggered the accelerated development of both highend and mass residential properties, pushing the total stock of
high-end residential in the submarket at end 2013 to about 16,000
units. The favourable fundamentals within the zone have attracted
many well-known local developers, such as Gaoxin and Ziwei, to
provide high-quality accommodation for the district’s workforce.
22 China’s City Winners
Looking ahead, high levels of congestion and limited land supply
in the City Centre have and will continue to result in housing
demand spilling over to other submarkets. Much of the new supply
and demand for housing has coincided with the extension of the
transportation network and the government’s economic development
direction. Over time, City North and City East, traditionally areas
that are more oriented towards commodity housing, will also evolve
to capture a larger share of high-end residential developments.
Many experienced developers, such as Greenland Group, Vanke
and Longfor Properties, are already developing high-end residential
projects in these submarkets, and we expect these and others
to raise overall standards and provide competitive alternatives to
satisfy the growing demand for high-quality accommodation in Xi’an.
Xi’an High-End Residential Stock, 2010-2016
40,000
35,000
Number of Units
Overall demand for high-end residential properties in the city has
been robust in recent years, with the rapid pace of economic growth
since the implementation of the ‘Go West’ policy in 2000 creating a
large, high-income population that can sustain the market. As the
income level of workers employed in the high-tech and financial
services sectors are among the highest, most high-end housing
has gravitated closer to established office precincts. Similar to other
provincial capital cities in China, Xi’an has the greatest regional
catchment area within Shaanxi Province and this includes affluent
households from resource-rich second-tier cities and counties, such
as Yan’an and Yulin, who are also keen on purchasing residential
units in Xi’an. Their preference is for high-end residential properties
to the south of the city, particularly Qujiang, as most of the projects
in this submarket take advantage of amenities such as South Lake
and Tang Paradise.
30,000
25,000
20,000
15,000
10,000
5,000
0
Qujiang
City Centre City North
As of 2010
2011-2013
Source: Jones Lang LaSalle Research
Hi-Tech
Zone
City East
2014-2016 Forecast
Xi’an City Profile 2014 23
Business and Logistics Parks
Business Parks
Xi’an’s current business park stock is only 700,000 sq m and, as
a result, overall occupancy is almost 100%. Most of the business
park space (around 90%) is located in the Hi-Tech Zone, its notable
projects including Xi’an Software Park and the Ascendas Innovation
Hub. After more than a decade of development, a number of
software and high-tech outsourcing services companies, including
IBM, Sybase, Oracle, Emerson and Rockwell, now have large-scale
R&D and production bases in the zone.
In order to fulfil growing corporate expansion requirements, the
Hi-Tech Zone has an extension plan for a section of the Xi’an
Software New City business park. Located in the south of the
Hi-Tech Zone, the park is being developed in several phases;
the planning area for the first phase is about 2 million sq m and
comprises a number of high-profile projects such as Xi’an GLP
I-Park and ChinaSoft International’s Ten-Thousand-Staff Base.
These projects are scheduled for completion in 2014-2015 and will
further strengthen Xi’an’s leading position as the high-tech industry
hub for Western China.
24 China’s City Winners
Logistics Parks
As a key transportation hub and high-tech production base in
Western China, the logistics warehouse market in Xi’an has grown
rapidly in recent years. There are three major bonded logistics zones
in the city - namely Xi’an-Xianyang Airport Bonded Logistics Park,
Lintong Modern Logistics Park and Xi’an International Trade and
Logistics Park - and each is well-connected to the city’s transport
infrastructure, including the airport and its railways.
The majority of international-grade non-bonded warehouse
projects are located in the Hi-Tech Zone and Xi’an Economic
and Technological Development Zone, and a growing number of
schemes involve well-known logistics warehouse developers that
have already entered the market, such as Shangchu Logistics,
Zhongchu Logistics, Kerry EAS, Mapletree and GLP. Supported
by strong demand from the manufacturing sector, retailers and
e-commerce suppliers, the vacancy rate of the non-bonded logistics
warehouse market was around 8% at end 2013.
A modern logistics sector is one of the key development directions
in the Xi’an 12th Five-Year Plan and, as such, the government plans
to cultivate more logistics enterprises as well as to construct six to
eight new logistics parks. A number of successfully delivered longterm blueprints will consolidate the strength of Xi’an as the primary
logistics hub in Western China, and cause both domestic and foreign
logistics developers to increase their investment in the city.
Major Business Park and Logistics Clusters in Xi’an
Xi'an-Xianyang Airport
Bonded Logistics Park
A ir p o r
t H ig h
Xianyang International Airport
The O
ing
uter R
way
Road
Economic and Technological
Development Zone
Second Ring Road
–S
ha
an
xi
Hi
gh
wa
y
ad
Source: Jones Lang LaSalle Research
Lintong Modern
Logistics Park
ai
oad
g–
min
ay
Metro Line 2
ing R
B
n
eiji
n
Ku
hw
City Center
–
y
gh
e1
Chang'an Road
uter R
W es t Th ird Ri ng Ro
The O
Lin
ang
gas
wa
an
tro
Lia
ng
nyu
or
Kh
h
Hig
Sh
Me
East Third Ring Road
Lianyungang – Khorgas Highway
ig
gH
Xi'an International Trade
and Logistics Park
Major Logistics Cluster
Hi-Tech Industries
Development Zone
Major Business Park Cluster
Major Development Zone
Xi’an City Profile 2014 25
Hotels
With more than 3,000 years of history, including 1,100 years as
one of the Four Great Ancient Capitals of China, and its worldwide
fame as one of four major ancient capitals of civilisation (alongside
Athens, Cairo and Rome), Xi’an has a wealth of historical and
cultural heritage assets such as the Terracotta Warriors and Horses,
Huaqing Pool and Big Wild Goose Pagoda. These sites have
consistently attracted millions of tourists to Xi’an every year and, as
a result, Xi’an’s tourism and hotel market has witnessed sustained,
impressive growth over a number of years.
Tourism is therefore one of the pillar industries of Xi’an’s economy
and, unsurprisingly, ranks top among tourist sectors across all the
major cities in north-west China, with total domestic tourist arrivals
in Xi’an reaching 78.6 million in 2012, a 20% increase over the
previous year and a CAGR of 19.5% from 2008 to 2012. Meanwhile,
international arrivals reached 1.2 million in 2012, a 15.1% year-on-year
growth over 2011. In terms of the origin of international tourists, the US
is the largest market, followed by Japan, Korea, the UK and France.
a regional international meeting and exhibition centre, and this will
expedite the long-term growth of hotel demand in the city.
The extensive presence of quality hotels has consolidated Xi’an’s
position as one of the most important tourism and exhibition hubs
in the region. According to the Xi’an Tourism Bureau, as at end
March 2013 there were 121 star-rated hotels in the city - including 9
five-star, 27 four-star, 76 three-star and 9 two-star - providing a total
of 23,199 guest rooms. Among these are international hotel brands,
such as Hilton, Sofitel, Sheraton, Crowne Plaza and Shangri-La, who
are already well-established in the city; Jones Lang LaSalle Hotels
Research forecasts there are around 2,700 international-brand hotel
rooms scheduled for supply over the coming three years.
With the opening of more international-brand luxury hotels and the
continuous growth of leisure, corporate and MICE demand, the
average daily rate of hotels is expected to grow further in the mid
to long term. However, occupancy levels might increase at a more
moderate pace, as the market will need a certain period to absorb
the additional hotel supply.
Number of Rooms
Major International Brand Hotel Supply, 2009-2016 F
Along with expanding tourist demand, the recent rise of the MICE
16,000
(Meeting, Incentive, Conference and Exhibition) industry has also
14,000
provided further robust demand for quality hotels in the city. By
12,000
November 2012, 154 major conferences and events had been
10,000
hosted in Xi’an and, according to the China Conference and
8,000
Exhibition Research Centre, 88 intra-city meetings and conventions
6,000
were held in Xi’an in 2012 alone, which ranked sixth after Beijing,
4,000
Shanghai, Guangzhou, Chengdu and Nanjing among all mainland
2,000
cities. Moreover, the Xi’an Annual Statistical Bulletin reveals that 22
0
international and national sports events have been hosted in the city,
2009 2010 2011 2012 2013 2014 f 2015 f 2016 f
and it has even become a permanent site for certain events, such
Stock
New Supply
as the Eurasia Forum and the International Horticultural Exposition.
According to the 12th Five-Year Plan, Xi’an will be developed as
Source: Jones Lang LaSalle Hotels & Hospitality Group
26 China’s City Winners
Definition of Terms
Economic Dashboard
Population: Population refers to the total population as at or near
year-end 2012. There are two definitions of population:
•• Registered population – those officially registered with the police.
•• Permanent residence population – those who actually reside permanently
in a location, usually longer than one-half year.
Xi’an’s population refers to permanent residence population, as determined
by Xi’an Municipal Statistics Bureau.
GDP: Refers to the gross domestic (i.e. regional) product of a location.
Employment: Refers to the number of persons engaged in labour and
receiving remuneration payment or earning business income, including
fully-employed staff and workers in state-owned, collective-owned, privately
owned or other kinds of economic sectors and otherwise employed persons.
Population Growth: Refers to the compound annual growth rate over the
10-year period 2001–2011.
GDP Growth: Refers to the compound annual GDP growth rate from 2011
to 2012.
Total Annual Graduates: Refers to the total number of students graduating
with degrees from a higher education institution in a given area.
Unemployment Rate: The registered urban unemployment rate refers
to the ratio of the number of the registered unemployed to the sum of the
number of persons employed in a location.
Average Wage Rates: Average wage rate refers to the average wage of
fully-employed staff and workers. It is calculated as follows: average wage
of fully employed staff and workers = total wages of fully-employed staff and
workers/average number of fully-employed staff and workers.
Currency: Monetary values are expressed in the currency reported (either
RMB or US$), with the other currency in parenthesis and calculated with the
year-end 2013 exchange rate of 6.0533 RMB/US$.
Real Estate Dashboard
Offices Grade A Stock: Refers to the total completed Grade A office space
(occupied and vacant). Grade A properties are generally wholly owned and
have an above-average condition and amenities suitable for MNC tenants.
Rail Passengers: Refers to the number of passengers travelling through a
city by railway, as determined by number of tickets sold.
Offices Grade B Stock: Refers to total completed Grade B office space
(occupied and vacant). Grade B reflects a middle-range property in the
market.
Freight Traffic: Refers to the volume of freight transported by various
means, measured in millions of tons.
Retail Stock: Represents the total modern retail stock, consisting mostly of
shopping malls and department stores.
Utilised FDI: Refers to remittance, equipment and technology financed
from abroad, by loans, foreign direct investment (FDI) and other
forms undertaken by the Chinese government at all levels, by various
departments, enterprises and other economic units.
Office Vacancy Grade A: Refers to Grade A office floor space (as a % of
total Grade A stock) in existing properties that are physically vacant, ready
for occupation in the next three months and are being actively marketed.
Exports: Refers to value of exports of trade companies registered in Xi’an.
GDP/Capita: Refers to total gross domestic product divided by the resident
population.
Disposable Income/Capita: Refers to the actual income at the disposal
of a person which can be used for daily expenses, i.e. total income minus
income tax, property tax and other current transfers.
Higher Education Institutions: Refers to higher education institutions
providing higher education courses and training for professionals. They
include full-time universities, colleges, high professional schools, high
professional vocational schools and others. Higher education institutions
are set up according to the central government’s evaluation and approval
procedures. This category may also include some adult education
institutions.
Grade A Office Rents: Average rents for a whole floor in the mid zone of a
Grade A building. Does not include management fees or landlord incentives.
Retail Rents: Refers to average rents for tenants on the ground floor of
modern retail centres (generally shopping malls and department stores).
Does not include management fees or landlord incentives.
Management Fees: Refers to fees levied by property managers for general
upkeep of commercial properties.
High-End Residential Capital Values: Refers to typical capital values
(within a range) for high-end residential projects.
Grade A Offices – Indicative Yields: Refers to the best (i.e. lowest) yield
estimated to be achievable for a notional office property of the highest
quality and specification. Indicative yields represent Jones Lang LaSalle’s
‘market view’, based on a combination of market evidence where available,
and a survey of expert opinion.
Xi’an City Profile 2014 27
Jones Lang LaSalle Research – Asia Pacific
Contacts:
Sheng Chiao
Managing Director of Xi’an
+86 29 8932 9800
[email protected]
Jones Lang LaSalle is the number one real estate research provider
in Asia Pacific. A team of 100+ researchers are committed to
providing best-in-class market knowledge that enables clients to
optimise real estate strategies and mitigate risks. Our award-winning
research includes the flagship Asia Pacific Property Digest (APPD)
and industry-leading Real Estate Intelligence Service (REIS).
Frank Ma
Head of Research
Jones Lang laSalle, West China
+86 28 6680 5072
[email protected]
www.ap.joneslanglasalle.com/researchhub
Dr Jane Murray
Head of Research
Jones Lang LaSalle, Asia Pacific
+852 2846 5274
[email protected]
Michael Klibaner
Head of Research
Jones Lang LaSalle, Greater China
+852 2846 5276
[email protected]
World Winning Cities
Jones Lang LaSalle’s World Winning Cities programme is a
multi-year research initiative designed to draw together the essence
of contemporary city competitiveness and to predict the future city
winners and losers across the globe. The programme examines
trends that will impact on the business and economic landscape and
how they are coalescing to create the rising urban stars of the next
decade. It is unique in assessing the contribution of real estate to
sustainable competitive advantage and the implications for investors,
developers, corporate occupiers and city governments. World
Winning Cities Research goes beyond description to uncover the
‘why’ of city real estate market dynamics.
www.joneslanglasalle.com/worldwinningcities
www.joneslanglasalle.com/China50cities
Contacts:
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Director of Global Research Programmes
Jones Lang LaSalle
+44 20 3147 1198
[email protected]
Jeremy Kelly
Global Research Programmes
Jones Lang LaSalle
+44 20 3147 1199
[email protected]
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Xi’an
Unit 2202-03
CapitaMall Office
No.64 West Section of
South 2nd Ring Road
Yanta District
Xi’an 710065
Shaanxi, China
tel +86 29 8932 9800
fax +86 29 8932 9801
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To find out how
Jones Lang LaSalle can
assist you in making
real estate decisions
in China contact:
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Managing Director of Greater China
6/F
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1 Queen’s Road East
Hong Kong
tel +852 2846 5000
[email protected]
Sheng Chiao
Managing Director of Xi’an
Unit 2202-03
CapitaMall Office
No.64 West Section of
South 2nd Ring Road
Yanta District
Xi’an 710065
Shaanxi, China
tel +86 29 8932 9800
[email protected]
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