With the world’s longest cross-sea bridge linking Hong Kong, Zhuhai and Macau officially open to traffic, real estate experts are expecting a boost to sectors from retail to warehouses.
The Hong Kong-Zhuhai-Macao Bridge will greatly reduce travel time between cities in the so-called Greater Bay Area, which surrounds the Pearl River Delta. It will now take just over an hour to commute from the coastal city of Zhuhai to the Kwai Chung Container Port in Hong Kong, compared to 3.5 hours previously.
Retail and hotel sectors stand to benefit, with ease of travel likely leading to a boost to tourist numbers across the region, says Denis Ma, Head of Research at JLL Hong Kong.
“In Hong Kong, the new bridge along with the recently opened Guangzhou-Shenzhen-Hong Kong Express Rail Link is set to induce an additional 2.1 million mainland Chinese tourists to the city by 2020. Using the average spend of HK$3,400 (US$430) in shopping and dining by each mainland visitor in 2017 for reference, this translates into an additional HK$7.1 billion in retail turnover per year,” says Ma. This is equivalent to about 4 percent of retail spending from mainland visitors in 2017.
Across the Pearl River Delta in Macau, there will likely be a shift towards more mass market retail, including major fast fashion brands, as the city tries to attract a broader range of tourists, according to Gregory Ku, Managing Director at JLL in Macau and Zhuhai.
Industrial real estate markets will also feel the impact. The scarcity of land for warehousing and increasing rents in the more developed cities of Shenzhen and Guangzhou have pushed leasing demand into surrounding cities. With improved connectivity through the bridge, more cities in the west of the Greater Bay Area such as Zhuhai may become viable locations for industrial development.
“The shortened commute time will benefit the overall warehousing industry and increase demand for storage space,” says Silvia Zeng, JLL Head of Research for South China.
Of course, these changes will not all happen immediately. “The true value of the bridge may not be apparent for 10 years, if not longer,” Ma says.