郑州市场研究与分析Zhengzhou market analysis

Zhengzhou

Zhengzhou, the provincial capital of Henan, is recognized as the political center, culture center and economic center of Henan province. Zhengzhou is located in the middle north of Henan province, and it abuts the Yellow River on the north, Mount Song on the west, Huanghuai plain on the south and east. Zhengzhou administrates 6 districts, 5 county-level cities and one county, namely Zhongyuan district(中原区), Erqi district(二七区), Jinshui district(金水区), Guancheng district(管城回族区), Huiji district(惠济区), Shangjie district(上街区), Xingyang district(荥阳市), Gongyi district(巩义市), Dengfeng district(登封市), Xinmi district(新密市), Xinzheng district(新郑市) and Zhongmo county(中牟县). According to statistics of 2005, Zhengzhou covers an area of 7,446.2 sq km, including 1,010.3 sq km of city proper. In the end of 2005, Zhengzhou has a population of 7,160,000, including 4,241,000 citizens. Because Zhengzhou is located in the eastern central of China, it stands an important role as national transportation and communication center, and one of the most important cities in the new Euro-Asia Continental Bridge.

Location of Zhengzhou

Source: DTZ Valuation and Advisory Services

Transportation

Located in the center of China, Zhengzhou often plays central role in enforcing economic and cultural exchange in China.

–Zhengshou Xinzheng airport, national first-grade airport, is one of the five biggest airports nationwide.

-Zhengzhou is always recognized as the ‘heart’ of China railway. Its railway network comprises with the cross of Jing-Guang railway and Long-Hai railway, and the transit of Jingjiu, Jiaoliu, Yueshi and Pingbu railways. Zhengzhou North Railway Station is the biggest station in whole Asia, and Zhengzhou East Railway Station is the biggest part-load transshipment station in China. Export goods could be checked in Zhengzhou and export directly. Furthermore, there is a Zhengzhou-Hong Kong direct container train.

–Zhengzhou is one of the seven transport terminal-junctions in China. Its

highway transportation network comprises 18 provincial main highways, No. 107 and No. 310 national highways. Its current city construction is mainly focused within the third ring road. According the city construction planning, Zhengzhou will extend its ring road system to the fourth ring road, connecting the expressways located in the south western area, namely Lianhuo (连霍) expressway and the No.107 national highway.

- Planned to be for operation by 2013, Metro Line 1 will start from Xiliuhu Park, passes across Jianshe West Road, Zhongyuan East Road, Zhengzhou Railway Station, People Road, Jinshui road and the CBD. To be constructed under the ground, the total length of Metro line 1 will cover a length of 26 km. In addition, the Metro Line 2-6 is scheduled for construction by several phases.

Summary of the Data

Population (Person mn) GDP (RMB billion) GDP per capita (RMB) Total imports exports (USD bn) Exports (USD bn) Imports (USD bn) Utilized FDI (USD bn)

and

2001 2002 2003 [6.977

2004 [7.082]

2005 [7.16] [165]

2006 [7.243] [200.15]

[6.7697] [6.877] [82.21] [12,225] [0.099] [0.066] [0.034] [0.07]

[92.68] [110.21 [137.5] [13,584] [1.04] [0.69] [0.35] [0.092]

[15,910 [1.41 [0.87 [0.54 [0.157

[18,330[23,171[27,798] ] ] [1.72] [1.08] [0.64] [0.28]

[1.94] [1.39] [0.55] [0.34]

[2.47] [1.79] [0.68] [0.61]

Source: Zhengzhou Statistical Yearbooks (2002-2006), Zhengzhou Bureau of

Statistics And China Bureau of Statistics

Gross Domestic Product

Zhengzhou’s economy has maintained double-digit growth from [2001] to [2006]. The city’s GDP in [2006] amounted to RMB[200.15] billion with a y-o-y increase of [21.3%]. The annual growth rate reached a prominent level of 20% and up for the year 2004 to 2006.

GDP Per Capita

Zhengzhou’s GDP per capita has experienced double-digit growth since [2002]. The growth rate was as high as [26.4%] in [2005], hitting RMB [23,171] in [2005]. In [2006] it witnessed an annual increase of [19.9] percentage points, reaching RMB [27,798].

Population

The population of Zhengzhou has increased slightly and steadily from [2001] to [2006]. In end of [2006], the population was [7.243] million persons, up [1.1%] from [2005].

Per Capita Disposable Income

In [2006], Zhengzhou’s per capita disposable income for urban residents grew by [11.8%] to [RMB12,186] with a double-digit growth for [four] consecutive years. The growth rate in [2005] recorded a significant growth of [14.2%] y-o-y.

Gross Domestic Product Composition

In [2006], the tertiary industry contributed [42.7%] of GDP, increasing by [21.1] percentage points. The secondary industry contributed [53.5%], a moderate increase of [22.6] percentage points. The percentage of secondary industry in Zhengzhou’s GDP composition increased during the period [2002] to [2006], while that of the tertiary and primary industries decreased in the same period.

Foreign Direct Investment (FDI)

The utilized FDI of Zhengzhou witnessed a rapid upward trend from [2001] to [2006]. In [2006] Zhengzhou attracted utilized foreign direct investment of US$ [0.61] billion, with a remarkable y-o-y growth rate of [79.4%].

Imports and Exports

In [2006], Zhengzhou’s total imports and exports reached US$ [2.47] billion, growing by [27.3%] y-o-y. It witnessed a moderate grow from 2001 to 2006. In [2006], imports and exports were US$ [0.68] billion and US$ [1.79] billion respectively, increasing by [23.6%] and [28.8%] y-o-y.

Key Characteristics

The main uptown of Zhengzhou mostly concentrate in Zhongyuan district, Erqi

district, Jinshui district, Guancheng district, Huiji district and Zhengdong new district.

Major Residential Areas in Zhengzhou

Source: The People’s Government of Henan Province, DTZ Valuation and Advisory Services

Zhengdong New District（郑东新区）

The development plan of Zhengdong New District represents improvement of the urban living environment. With improvement of supporting facilities and relocation of corporations and government offices to this district, Zhengdong New District is expected to have a significant development growth. Jinshui district （金水区）

Jinshui district, located in the northeast of Zhengzhou is where the Henan provincial government offices situated. Also colleges, research academies and institutes and financial corporations are located within this district, it is recognized as political, cultural, technology and finance district. The good environment and well facilitated residential area attract many local people to reside in this area.

Zhongyuan district （中原区）

As the old city district of Zhengzhou, Zhongyuan district is located in the west of city and so-called the West Gate of Zhengzhou. The city government offices are situated in Zhongyuan district, which is known as the political district. In addition Zhongyuan district also is an important industrial area. With developed public facilities and accessibility, Zhongyuan district has evolved into an urban area. Erqi district（二七区）

Erqi district is the commercial district of Zhengzhou. Comprising the largest passenger transport center and the largest postal and telecommunication centre, Erqi district has both location advantage and advantage for commercial activities. With good public facilities and residential environment, Erqi district has developed into a modern district.

Guancheng district（管城区）

Guancheng district is located in the southeast of Zhengzhou where the Jinguang

railway and Longhai railway pass through. Furthermore, ruins of Zhengzhou Old City, Wen temple and other cultural relics makes Guancheng district full of traditional culture.

Huiji district（惠济区）

惠济区位于郑州北部、黄河南岸。基础设施完善、土地资源丰富，区域河南体育中心、大学城北区、新城区周边，郑州市唯一的省级开发区—郑州惠济经济开发区，即将建设的省武警总队营区，农大新校区、三全食品工业园等重大项目，集聚了人流活力，蕴含着无限商机。

Huiji district adjoins the north of Zhengzhou and south coast of Yellow river. Huiji district has mature supporting facilities such as Henan sports centre, colleges and universities. It also consists of the new city proper, Sanquan Food Industry Park, new and the only provincial-level economic development zone, namely Zhengzhou Huiji economic development zone. In addition, the dormitory of the provincial army is under construction. With such a high level of facilities, Huiji district is expected to have high potential for developments.

Residential Market

Summary of Data

Real Estate Investment: Zhengzhou (RMB bn)

Floor Space Completed:Residential: Zhengzhou (Sq m mn) Floor Space Sold:Residential: Zhengzhou (Sq m mn)

Average Selling Price (RMB/sq m)

2001 [4.76]

2002 [5.96]

2003 [7.43]

2004 [12.18]

2005 [16.81]

2006 [22.99]

[1.39] [2.07] [2.78] [2.79] [3.63] [N/A]

[1.31] [1,880]

[1.56] [1,914]

[2.57] [1,955]

[3.0] [2,004]

[5.56] [2,387]

[7.15] [2,975]

Source: Zhengzhou Statistical Yearbooks (2002-2006), Zhengzhou Bureau of Statistics And China Bureau of Statistics

Residential Area Completed and Sold

The Zhengzhou residential market has developed rapidly over the past few years. In [2006], demand reached peak levels, increasing by [28.5%] to [7.15] million sq m. And it had shown a rapid growth in 2005, with a y-o-y growth of [85.5%].

The completed residential area in Zhengzhou’s residential market witnessed a stable growth trend from 2001 to 2005, increasing by [30.0%] to [3.6] million sq m in [2005].

Average Residential Price

The average price of residential property in Zhengzhou experienced continuous growth during the period [2001] to [2006]. The average price increased to RMB[2,975] per sq m in [2006] with a y-o-y growth rate of [24.6%].

Market Outlook

With improvement of public facilities and relocation of corporations and government offices in Zhengdong new district, its commercial function is gradually. In addition, with the transportation and economic ties between Zhengzhou and Kaifeng, Zhengdong new district and Jinshui district is expected to further strengthen in terms of economic development. Besides, area in the vicinity of the highway connecting Zhengzhou and Kaifeng will become a new focal point of real estate development, which is expected to lead significant growth potential in the real estate market in both Kaifeng and Zhongmo county that is administrated by Zhengzhou city. With rising land costs, developers will be forced to develop higher residential buildings, thus lower residential buildings are expected to diminish. Average prices of higher buildings are higher than lower buildings; therefore the city’s average prices are expected to grow further. In 2006, sales of higher residential buildings have exceeded prices in lower residential buildings for the first time.

Strong demand of Zhengzhou real estate market brings an unbalanced supply-demand. The average price growth of Zhengzhou real estate market is attributable to strong and steady macroeconomic growth, speeding up of urbanization, limited land supply and prospective economic development that further attracts both the private sector and the working class to reside in Zhengzhou.