Between 2018 and 2020, technology, media and telecom (TMT) firms’ share of total nationwide occupied office space in China rose from 18% to 35%, surpassing the financial sector to become the largest single industry occupier. Over the next five years, the tech sector is predicted to grow rapidly in terms of its number of start-ups, company scale and quality.
Given the increasing importance of the tech sector to the nationwide office market, CBRE has begun conducting more focused and regular research into locations where science and technology-related occupiers are highly concentrated. The result of this initiative is CBRE’s T25 China Tech District Rental Index, which is designed to serve as a reference for tech occupiers looking to stay informed of current leasing market trends and to guide investors seeking to acquire assets catering to this burgeoning source of demand.
The quarterly Index tracks like-for-like rents in 25 tech districts. either office submarkets or business park submarkets, that are in tier I and tier II cities and meet certain criteria related to market size, tenant structure and lease dynamics, along with other headline data such as net absorption, vacancy and leasing activity. The Index is calculated by weighting the rental index of each tech district with the current stock of office submarkets and business park submarkets.
Supported by strong leasing demand, CBRE’s T25 China Tech District Rental Index reached 146.1 in Q1 2021, an increase of 0.9% q-o-q from Q4 2020. In contrast, the Nationwide Office Rental Index registered further losses. Six tech districts recorded higher rents on q-o-q basis in Q1 2021, with Beijing Dongsheng, Beijing Zhongguancun and Shanghai Zhangjiang registering the strongest gains. Although 12 tech districts recorded lower rents, the rate of decline in seven of these districts slowed compared to the previous quarter.