New industries reshape office space demand in Shenzhen

Shenzhen, often hailed as China’s hub of advanced manufacturing, has transformed into a global leader in consumer electronics and trade. Shenzhen’s electronics and information technology sector contributes one-sixth of China’s total output in this sector. On a global scale, the city produces half of the world’s telecommunication base stations, approximately 15% and 70% of all smartphones and consumer drones, respectively. Building on this foundation, the local electronics sector continues to expand into emerging areas, and recorded year-on-year output growth surpassing 20% in 2024 in several strategic segments, including 3D printers.

Shenzhen-based consumer electronics brands have established a comprehensive business ecosystem spanning R&D, manufacturing, application, and marketing. Overall, four major growth pathways were adopted by many firms for domestic and international expansion.

Figure 1: Four proven pathways for Shenzhen brands’ expansion

Source: JLL South China Research

Beyond consumer electronics, other emerging industries like artificial intelligence, robotics and eVTOL (electric vertical take-off and landing) aircraft, have been undergoing rapid development. These sectors often combine technological innovation with strong marketing focus. In recent years, with lower customer acquisition costs and higher conversion rates, social media and live streaming platforms have emerged into the primary battleground for brand engagement. Capitalising on the city’s specialised talent pool, companies in Shenzhen have swiftly adapted to market trends, deploying data-driven customer targeting, innovative campaigns, and regionally tailored promotions. This not only drives sales but also enhances brand identity and sustains consumer awareness.

These companies leverage China's affordable manufacturing and innovation strengths to expand globally, especially in emerging markets. In 2024, trade with the Belt and Road Initiative partnering countries represented 50.3% of Shenzhen’s total import-export volume. Emerging markets absorbed over half of the city’s smartphone exports.

Despite that most companies are currently concentrated in non-prime office spaces and industrial parks, many of these areas overlap with or border the city’s prime office submarkets, including Bao’an Central, Qianhai and Hi-tech Park. The lowering Grade A office rents prompted certain rapidly growing businesses to upgrade with a reasonable budget increase. Notably, the TMT sector including AI and big data, accounted for nearly 40% of the leasing volume in Shenzhen’s Grade A office market in 2024.

The global expansion of these sectors is also accelerating demand growths for cross-border business services. Leasing demand from smart manufacturing, trade and logistics has become a pillar of the office market. JLL data reveals sizable office demand from global trade businesses. From Q4 2024 to Q1 2025, cross-border e-commerce merchants, freight forwarders and sourcing companies together leased nearly 20,000 sqm of Grade A office space, representing about 10% of Shenzhen's total leasing volume.

With further growth in cross-border operations, overseas expansion, R&D upgrades, and digital branding, these industries hold significant potential for office space expansion and upgrades in the near future.

Figure 2: Emerging industries reshape Shenzhen's industrial landscape

Source: JLL South China Research