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Opportunities abound in the Greater Bay Area

7 December 2018

The integration and development of the Greater Bay Area is possibly the most exciting real estate opportunity in China.

The GBA consists of nine cities: Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing in the Pearl River Delta and the two special administrative regions of Hong Kong and Macau.

In terms of population and GDP (67m and $1.3trn), the GBA is comparable with economic powerhouses such as the San Francisco Bay Area (7.6m and $0.8trn) and the Greater Tokyo Area (44m and $1.8trn), yet will overtake both by 2030, when GDP is expected to $4.62trn and population more than 100m.

The key to the GBA’s future development is integration of the 11 cities and there is huge ongoing infrastructure work. The most eye-catching project is the 55km long Hong Kong – Zhuhai – Macau Bridge, which opened in October 2018. More important however are the high-speed rail links between the GBA’s cities, which will cut travel time between major cities to 90 minutes and allow passengers to travel the whole bay area in two hours.

As well as the rail links pictured above, there is a plethora of other transport initiatives: Guangzhou and Shenzhen are expanding their subway networks to link with Zhongshan, Foshan and Dongguan.

There is a considerable wealth gap between the cities of the GBA, for example GDP per capita in Hong Kong is six times that of Zhaoqing. There will be migration into the core cities of the inner bay area and from rural areas into cities. The GBA will also attract workers from elsewhere in China. This internal migration will be an important driver of opportunity for real estate investors.

Growth prospects differ between cities and sectors, with the most interesting opportunities likely to arise outside the mature and space-constrained markets of Hong Kong and Macau. Shenzhen and Guangzhou, as the largest cities in the bay area, offer the broadest range of opportunities. Development site acquisitions show the pattern of future activity, with much centred on Guangzhou and Foshan.

Further reading:
Greater Bay Area