The current development explosion in China is more than just a housing boom. We’re seeing increased investment in mixed-use communities as a way of future-proofing investments. For example, if demand for office space falls, investment in residential and retail could help shore up lost revenue on the office side.
Another way developers are hedging against downturns is by developing areas near transportation hubs. The Chinese government’s commitment to transportation is staggering. Already China has more high-speed rail than any other country. The July 23 crash of a high-speed train that killed 39 people has brought new scrutiny to that rapid expansion, but Beijing is still pledging $300 billion by 2020 to double the capacity of its high-speed network. Match that with a push for new airports, highways, and urban rapid transit, and a revolution in modern transport becomes clear. Since moving to Shanghai at the end of 2006, I’ve seen the addition of two airport terminals, three high-speed rail lines to Beijing, Nanjing, and Hangzhou, and eight new subway lines. Savvy developers in these cities are looking to build around those transportation hubs, seeing vast opportunity in the long term.