Cushman & Wakefield today released its Life Sciences: Changing the Genetics of China's Commercial Real Estate report. The life sciences industry, as one of China's strategic emerging industries, has witnessed tremendous growth over recent years. China itself has become one of the most important life sciences markets globally. Driven by a host of factors, including:
- Organic industry growth
- Population demographics
- Spending power –- public and private
- National health coverage
- Policy and reform
- Research and innovation ...
... China’s life sciences sector has also not gone unnoticed by investors in the sector, whether it’s government investment, corporate investment, or private individual investment.
Shaun Brodie, Head of Occupier Research, Greater China, Cushman & Wakefield said, “The life sciences industry in China will follow the global trend and continue to innovate in a variety of ways, including digital innovation in medical and pharmaceutical services and the application of artificial intelligence within the whole industry chain. Thus, the industry will continue to drive investment in commercial spaces such as laboratories, office buildings and industrial parks. With the continuous advancement of the industry in general, we are looking forward to life sciences being a catalyst that contributes to a change in the genetics of commercial real estate in China.”
Spending Power
As disposable income rises, so individual citizens in China will be more willing to spend money on their healthcare and the healthcare of their families.
China’s healthcare expenditure (2010-2020)
Source: National Health Commission (PRC), Cushman & Wakefield Research
Policy and Reform
In addition, policy and reform are crucial features enterprises need to be clearly aware of, especially in the China marketplace. Major life sciences-related policies issued by the authorities in China are many, including "Healthy China 2030," the establishment of industry clusters, the 14th Five-Year Plan, and local provincial and city-level policies.
Research and Innovation
The levels of research and innovation are key to cultivating new business opportunities within any industry sector within a region, including life sciences in China. The foundation of research and innovation can be found in universities and the graduates they produce. Also important is the amount spent on the R&D of new products, and in the case of life sciences, these products could range from new medicines to new medical devices – and if these new products are truly ground-breaking, then this can lead to product innovation.
The number of new innovative medicines/medical equipment developed in mainland China (2018-2021)
Source: National Medical Products Administration, Cushman & Wakefield Research
Location and Set Up Considerations
Real estate plays an integral role in the business success of any life sciences enterprise and making the right choice in terms of which location is best suited to establish business operations can often make or break the business.
Good choices are often derived from strategic study and analysis and via much examination. Life sciences enterprises operating in China attach much business importance to regional policies, the local scientific research environment and talent pool, and an area’s industry aggregation.
In terms of locations, biotech parks in China are a good start for those life sciences enterprises either starting up or entering China for the first time. Today, countless local governments have set up biotech parks, or more specially biopharmaceutical industrial parks (BIPs) in China. Continually ever more domestic and overseas life sciences enterprises are drawn to station a business presence in their zones. Given this situation, these parks have been one of the chief proponents of the swift growth enjoyed by the life sciences industry sector in China. At the present time, BIP development in China is still evolving, as they compete for enterprise investment. Currently, most mature BIPs are located in cities such as Jiangsu, Shandong, Guangdong, Zhejiang, Shanghai, and Beijing.
Distribution of the top 100 BIPs in China (2021)
Source: sina.com, Cushman & Wakefield Research
Massive life sciences-related enterprises have functional business departments located in China. These business departments include regional headquarters, production/wholesale bases, research laboratories, incubators, and accelerators to name a few. When specifically considering Grade A office space options, life sciences enterprises are no different from other enterprises regarding their criteria for selecting the optimal quality office location.
When considering the life sciences industry and the related real estate market at the city level, China has a number of important markets. For the purposes of this report, we have examined four of them: the four first-tier cities of Beijing, Shanghai, Shenzhen, and Guangzhou. Ahead, it is expected that most major cities in China will achieve significant breakthroughs in the life sciences industry during the 14th Five Year Plan period.
Jonathan Wei, President, Project & Occupier Services, China, Cushman & Wakefield, said, “China has grown into an important force in the life sciences industry that cannot be ignored. With the emphasis on talent, scientific research and innovation and commercial space, the life sciences industry in China will realize higher levels of digitalization and intelligence during the 14th Five-Year Plan period. Cushman & Wakefield has a strong national team and will continue to pay attention to the development of the life sciences industry and provide suggestions for the investment and upgrading of the sector within China.”
Tony Su, Managing Director, Head of Industrial & Logistics Services, China, Cushman & Wakefield, said, "The location consideration of life sciences companies is a complex process that requires a full understanding of the market, environment and government capabilities. As a well-known professional international real estate consulting firm, Cushman & Wakefield will continue to help life sciences companies land and thrive in China.”
Please click here to download the full report.
About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms in the world, with approximately 50,000 employees in over 400 offices and 60 countries. In Greater China, a network of 22 offices serves local markets across the region, earning recognition and winning multiple awards for industry-leading performance. In 2021, the firm had revenue of $9.4 billion across core services including valuation, consulting, project & development services, capital markets, project & occupier services, industrial & logistics, retail and others. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.
