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| White Paper on Industrial Property Released, MNCs Attracted by China's Emerging Industries |
July 5, 2006 |
| China's market has become increasingly important for international industrial companies. With more options available, multinational corporations (MNCs) have more questions to ask when they plan to invest in other cities rather than the three mega cities of Shanghai, Beijing and Guangzhou. According to Frontiers of China's Emerging Industries, a white paper released by Jones Lang LaSalle (JLL) to provide information about the geographical choice of industrial investment, Chengdu, Suzhou, Dalian and Tianjin are most appealing to MNCs, other emerging cities, such as Chongqing, Harbin and Wuhan, also top the list. China's market has become increasingly important for international industrial companies. With more options available, multinational corporations (MNCs) have more questions to ask when they plan to invest in other cities rather than the three mega cities of Shanghai, Beijing and Guangzhou. The white paper by JLL probes deep into the China's rapidly changing market, introducing major reasons for the choice of business locations. Trent Iliffe, a JLL executive for China's industrial real estate, said that JLL, in cooperation with many MNCs in Asia Pacific, has provided an objective assessment of candidate cities and a framework for choosing an ideal location for industrial facilities. He said that under this framework they studied the adaptability of China’s 25 cities to three industrial operations: comprehensive industry, R&D and low-cost manufacturing. Kenny Ho, a JLL senior research manager pointed out that economy, labor, infrastructure, government or business environment and real estate are the main five determinants of the choice of business location. They used 30 indexes to assess the five aspects of the 25 cities to find out their overall competitiveness. According to their findings, Harbin, Chengdu and Dalian are ideal for low-cost businesses, Qingdao and Tianjing for medium-cost businesses, and Shanghai for high-cost businesses. Then they rated the 25 cities based on their competitiveness in terms of their adaptability to the three types of industrial activities. Despite high cost of comprehensive industries, Shanghai, Beijing and Guangzhou, followed by other popular cities such as Tianjin, Suzhou, Dalian and Qingdao, remain charismatic. Anna M. Kalifa, JLL head of research in Beijing, believed that Bohai Rim Region, represented by Tianjin, Dalian and Qingdao, has increasing charm as industrial location. With Japan, South Korea, Greater China and ASEAN as its target, Dalian is turning itself into a center for software industry, BPO and ITES in the north Asia. Ideal business locations for R&D, high-value or small-scale industrial operations include some more developed cities like Shanghai and Guangzhou, emerging cities that have attracted large amount of FDI, and other emerging cities that boast abundant human resources. Anna firmly believed that Tianjin would become a powerhouse for R&D and sophisticated industry. In 2007, she said, once the high-speed railway connecting Beijing and Tianjin is completed, it will only take half an hour to commute between the two cities, which will enable businesses to produce at a low cost and recruit well-educated and –trained professionals. Ideal business locations for low-cost manufacturing or mass production are those cities which can provide low-cost resources. Such cities as Harbin, Jinan and Nanchang are less known to foreigners. Considering that industrial property investment is a long-term strategy, JLL attempts to dig out more opportunities by assessing the possible changes in industrial real estate in the next few years. JLL assessment will guarantee more secure decisions by businesses. Trent Iliffe added that the analysis in the white paper was a yardstick for JLL clients to gauge the strengths and weaknesses of each city. In his opinion, businesses needs both vision and careful consideration of the business location if they plan to invest in China, so industrial real estate professionals should look at a broader picture and considering various possibilities in choosing their business site. Jones Lang LaSalle Jones Lang LaSalle (NYSE: JLL), the only real estate investment management and services firm named to Forbes magazine's "400 Best Big Companies," has over 100 offices worldwide and operates in more than 430 cities in over 50 countries. With 2005 revenue of over USD1.4 billion, the company provides comprehensive integrated real estate and investment management expertise on a local, regional and global level to owner, occupier and investor clients. Jones Lang LaSalle is an industry leader in property and corporate facility management services, with a portfolio of over 927 million square feet (about 86.4 million spare meters) worldwide. In 2005, the firm completed Capital Market sales and acquisitions, debt financing, and equity placements on assets and portfolios valued at USD 43 billion. LaSalle Investment Management, the company's investment management business, is one of the world's largest and most diverse real estate money management firms, with approximately USD 34 billion of assets under management. Jones Lang LaSalle has over 45 years of experience in Asia Pacific, with over 10,000 employees operating in over 30 key markets across the Asia Pacific region. Its China operations have over 330 professionals and 3,300 on-site staff, providing quality real estate advice and services in the areas of retail, residential, commercial and industrial management services, facilities management, investment and strategy consultant, project and development services and research. Key clients include various government agencies, MNCs and developers, as well as owners of high-end residential and commercial buildings. http://office.focus.cn/newshtml/219763.html |
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