Savills China Research Hangzhou SPOTLIGHT Hangzhou Report 2018 savills.com.cn/research 2018 Hangzhou Report City and Economy Overview Hangzhou is at the forefront of China’s push to develop its tech industry, and serves as a blueprint for other cities across the country. Hangzhou’s growth is symbolic as China’s continuing transition from manufacturing to a value-added, serviced-based and technologically-advanced economy. Economy & Population size FIGURE 1: 2017 Top 10 city tertiary GDP per capita Hangzhou’s GDP achieved an 8% real Guangzhou 105,214 growth in 2017, totalling RMB1,255.62 Suzhou 104,986 billion, which put the city as the 10th Beijing 103,972 largest economy in China. Tertiary GDP increased by 14% in 2017, Shanghai 85,942 accounting for 63% of the total GDP. Hangzhou 82,988 The percentage of tertiary GDP to Shenzhen 70,733 total GDP has risen from 49% in Tianjin 69,285 2011. The Hangzhou permanent Wuhan 65,555 population reached 9.47 million, up Chengdu 46,061 3.05% YoY. Urban population reached Chongqing 7.27 million, accounting for 76.8% 31,101 of the total population. According to - 20,000 40,000 60,000 80,000 100,000 120,000 2017 China Urban Research Report Source: National Bureau of Statistics released by Baidu Maps (2017年 度中国城市研究报告), Hangzhou was 9th place in China in terms of TABLE 1 : Hangzhou GDP and population growth past decade urban vitality1. The incoming work force keeps the economy attractive 5 year CAGR 2007 2012 2017 and builds up a virtuous cycle of (2012-2017) business growth and technological advancement. GDP (RMB bn) 410.1 780.2 1,255.6 10.0% Population (mn) 7.9 8.8 9.5 1.5% 1 Urban vitality: Baidu Maps uses big data to rank cities by inflow of residents staying for more than two months. Source: National Bureau of Statistics savills.com.cn/research | 01 2018 Hangzhou Report Wealth FIGURE 2: Number of billionaires by city 2016 vs 2017 Built on the fast growing 2017 2016 high-technology industry and 360 e-commerce, Hangzhou is quickly 330 becoming home to fortune. GDP 300 per capita increased 13.6% in 2017 270 to RMB136,656, and remains the 240 highest in Zhejiang province. Urban 210 180 disposable income per capita was 153 150 RMB56,276, up 7.8% YoY. The 123 120 robust IT industry in Hangzhou has 90 also made an increasing number 60 of billionaires; based on Hurun’s 30 2017 “The Richest People in 0 China” ranking, Hangzhou has 153 billionaires, 30 more than in 2016. Hangzhou is the 4th in China in number of billionaires and has the Source: Hurun most billionaires among second-tier cities. Hangzhou is also home to 26 FIGURE 3: Sector breakdown of companies valued over unicorns (start-ups valued over US$1 US$100 million billion) and 105 companies valued over US$100 million according to 2% a weLian (a platform that connects 3% 5% 16% investors and start-ups) report. The Finance Corporate service unicorns in Hangzhou rank third in 5% E-commerce volume after Beijing and Shanghai, Medicare and Health 7% and second in value after Beijing. The Transportation Hardware unicorn companies have become 16% Local daily life service the forerunners in the country’s 8% Culture, Entertainment and Sports development of new technologies Real Estate Service and the digital economy. Unicorns Education Games in Hangzhou were valued at $141.9 11% Social Network billion and are focused mainly 15% Tourism on e-commerce, IT and internet 11% financing. Ant Financial, the company that runs Alipay and is located in Xihu district, was had the highest valuation Source: weLian at US$75 billion. 02 | savills.com.cn/research 2018 Hangzhou Report Within Hangzhou, the city also boasts institutions of higher education in Infrastructure an expanding metro network. In Hangzhou, led by Zhejiang University, 2017, three lines were in operation a Project 211 and 985 university. In With an extensive network of (Line1, 2 and 4) with a totalling length 2017, Hangzhou was home to 79,300 expressways and railways, Hangzhou of 107.02 km. The city plans to add graduates with around 10,000 holding is highly connected with other 10 more lines—including extensions a master’s degree or above, up by cities in Yangtze River Delta and to the three existing ones—as part 4.6% and 21.7% YoY, respectively, Zhejiang province. Business people of the city development preparation the highest level on record. in Hangzhou can make it to Shanghai for hosting the 2022 Asian Games. There are 13 international schools in within an hour by high-speed train, The total length of metro network Hangzhou with seven in Xihu District, making it a hub for cities south of when complete will be 387.8 km. including Cambridge International Shanghai. Now Hangzhou has three While some cities are answering Centre of Hangzhou Yulan School, train stations, with Hangzhou East government’s call to manage Fixed Hangzhou Entel Foreign Language Railway Station being the newest one Asset Investments (FAI), Hangzhou, School and Marco Polo International (completed in 2013) which specifically with its schedule to host the School. serves high-speed rail passengers. international games, will continue to As for airports, Hangzhou’s Xiaoshan improve its infrastructure. Hangzhou is also witnessing a International Airport ranked as the revolution in its education industry— 10th largest international airport the launch of China’s first private in China, serving 25.57 million Education research university, Westlake passengers both domestically and University. The school has received internationally in 2017, up by 12.6% Hangzhou has an ample education over RMB100 million, and will rely Yo Y. resources supplying its new industries on private donors for most of its and growing economy. There are 18 funding. Currently, Tencent’s CEO MAP 1: Hangzhou metro plan 2022 Source: Hangzhou Metro savills.com.cn/research | 03 2018 Hangzhou Report Pony Ma and Dalian Wanda’s founder down on earth, there are Suzhou (莫干山) as well as international trips Wang Jianlin lead the donations. and Hangzhou.” With its canals and to cities such as Los Angeles and The non-profit institution will carry waterways, hills, temples, Longjing Singapore. out basic and advanced scientific tea plantations, Xixi National Wetland research, emphasizing the cultivation Park and the world-renowned West With its natural beauty, the city’s of innovative technologies and their Lake, Hangzhou has built a reputation tourism industry is growing. In 2017, applications. The fact that Westlake as one of the most beautiful cities Hangzhou received 162.9 million University relies on private business in China. Hangzhou ranks as the visitors and a total realized tourism donations could create synergy 3rd most liveable city in China, revenue of RMB304.1 billion, up between educational institutions and following Shanghai and Suzhou in by 15.8% and 18.3%, respectively. businesses. ULI’s 2016 Chinese Mainland Real During the G20 Summit, Hangzhou Estate Market survey. In addition, showed the world its charm with its Environment and Tourism with more developed transportation beautiful natural scenery and city infrastructure, Hangzhou citizens can development and, in four years, take easy getaway trips to nearby the 2022 Asian Games will provide As the old Chinese saying goes tourist spots like Thousand Island Hangzhou another opportunity to “Up in heaven, there is paradise; Lake (千岛湖) and Mogan Mountain showcase itself to the world. 04 | savills.com.cn/research 2018 Hangzhou Report Hangzhou Development Plan Covering a total land area of 16,596 sq km, Hangzhou is comprised of ten urban districts and two rural counties (Tong Lu and Chun’an) and one county-level sub-city (Jian De). The development of the city is driven by three main industries—high-technology, intelligent manufacturing, and finance. including Zhejiang University, which to implement the “national talent” Hi-tech Industry creates collaborations between strategy, enhance scientific and universities with hi-tech companies. technological innovation and hasten The growth of hi-tech industry economic transformation. Modelled in Hangzhou is focused on Future Sci-Tech City after Silicon Valley, the development government-planned Chengxi Sci- Future Sci-Tech City (the City) is zone is the result of district Tech Corridor. Crossing West Lake located west of downtown Hangzhou, government partnership with Alibaba District (西湖区), Yuhang District next to Zhejiang University, nine and hopes to create an international (余杭区), and Lin’an District (临安 kilometres from Westlake, and close ecosystem for local start-ups and 区), Chengxi Sci-Tech Corridor has a to the Xixi Wetlands. The City has a entrepreneurs. total area of 224 sq km, 30 km from total core development area of 35 sq east-to-west and 7 km from north- km. The City was established by the The City provides domestic and to-south. As part of the priority work Hangzhou and Zhejiang governments overseas high-level talent with many for the Zhejiang government under its 13th Five-Year Plan, Chengxi Sci-Tech Corridor is being built into a world leading IT centre with three TABLE 2 : Three areas focusing on hi-tech industry growth precincts—Future Sci-Tech City ( ), Zhejiang University 未来科技城 Region Specialty Area (sq km) Science City (浙大科技城), and Qingshanhu Science City Chengxi Sci-Tech Future Sci-Tech City Hi-tech 35 Corridor (青山湖科技城) as well as a few Xixi Valley Internet Chengxi Sci-Tech towns focusing on special industries Fintech 3.1 Finance Town Corridor and sectors. Chengxi Sci-Tech Chengxi Sci-Tech Dream Town Internet based 3 Corridor is also surrounded by Corridor a cluster of nine universities and higher-education institutions Source: National Bureau of Statistics savills.com.cn/research | 05 2018 Hangzhou Report 20.3 RMB bn 360.9 RMB bn 2011 2017 Future Sci-tech city total income from technology and trade related activities favourable policies such as settlement Grade A office and the demand will China within five years.