Luohu District, located in the southern part of Shenzhen, has been long dubbed as Hong Kong’s backyard, due to its proximity to Hong Kong, with hordes of Hong Kong people crossing the border during weekend for all sorts of entertainment and leisure activities. Founded in 1979, it was the first developed district in Shenzhen and one of the city’s core shopping destination for tourists. In 2013, The Gross Domestic Product (GDP) of the district grew 9.2% year-on-year to RMB 148 billion, with total consumption expenditure contributing over 60% of it, up 15.4% year-on-year to RMB90 billion.
However, after years of fast development, Luohu is confronted by a series of problems. Covering only 78.9 square kilometers, the district’s 36 square kilometers of developable area has been largely built out over the past few decades and many buildings have become cramped and aged.
On the other hand, Luohu is also losing out to other more vibrant districts as the Shenzhen government has shifted the development focus to the west. Enjoying more preferential policies, better infrastructure and business environment, newly developed districts such as Futian and Nanshan, as well as Qianhai, a newly established Special Economic Zone (SEZ) on the west coast of Shenzhen, have quickly won over many multi-national companies and high-end retailers.
To revitalise the old and congested district, Luohu is undergoing massive renovations. According to the spatial plan the Shenzhen City Planning and Land Resources Committee released in 2009, 33 urban renovation projects are set to upgrade the district, involving a total of 1.74 million square meters. Of which, a 666- meter-tall skyscraper will be built in Caiwuwei financial and commercial area – the next tallest building in China. The district will also see some new shopping centers and industrial parks redeveloped, including Qingshuihe International Automobile Logistics Industrial Park, Liantang Internet Industrial Park, Teli-Jimeng Industrial Park and Shenye Logistics Center.
Riding on the massive redevelopment, we saw more developers snapping up en-bloc properties for long term investment. In March, a Hong Kong listed real estate company announced to acquire two en-bloc properties in Luohu, namely a commercial building at 2010-2020 Chun Feng Road and a residential-commercial building at 2-16 Xiang Xi Road. The former one has a gross floor area of 15,000 square meters and the latter one has 4,400 square meters. On the other hand, the tender for a 13-storey commercial building, located at the intersection of Dongmen Road South and Jia Bin Road, also received active responses, highlighting a strong investment sentiment in the district.