The evolution of industrial parks in Shenzhen

Shenzhen is a major city renowned for innovation in southern China. Faced with limited industrial land resources, it turns to vertical factories to promote efficient land utilisation and to propel high-quality manufacturing going forward. Vertical factories consolidate production, research and development (R&D), and design within multi-storey buildings. They feature increased floor heights, enhanced load-bearing capacity, expanded equipment space as well as efficient vertical transportation systems.

Evolution of industrial parks in Shenzhen

With continuing development, Shenzhen's industrial spaces has evolved from version 1.0 to 3.0., gradually enhancing building hardware standards, including floor heights, load capacities, and vertical cargo transportation.

Version 1.0 of Shenzhen’s industrial space catered to light industrial manufacturing with single-storey factory buildings, while version 2.0 expanded to include additional office spaces and residential amenities, shaping what we now recognise as industrial parks. Industrial Park 2.5 and 3.0 represent the new generation of space, characterised by vertical expansion and improved hardware standards. Industrial Park 3.0 serves as the prototype of Shenzhen's vertical factory projects, boasting comprehensive and multifunctional facilities.

Despite the substantial scale of industrial parks, there is a dearth of high-quality projects in Shenzhen. Of the 86 million square metres of industrial parks in the city, 77 million square metres are occupied by version 1.0 and 2.0 projects. However, these projects are now struggling to meet the needs of emerging industries, necessitating a reshaping of industrial space. In contrast, version 2.5 and 3.0 projects, with superior hardware standards, only account for 10% of the total area.

Figure 1: Area of industrial parks in Shenzhen (GFA)

Source: JLL South China Research

Demand for next generation industrial parks

Shenzhen's innovation-oriented industry contributed over 41% to the GDP in 2023. Nevertheless, the city is grappling with inadequate industrial space within its modest area of 1,997.47 square kilometres. Moreover, the city’s land development intensity (LDI), referring to the proportion of construction land within the administrative area, now surpasses 50%. This ratio already exceeds the cautionary threshold of 30%. As land scarcity poses a challenge to Shenzhen’s industrial growth, spatially integrating the industrial chain vertically should help to address this problem by optimizing space and land utilisation.

Figure 2: Map of industrial park projects in Shenzhen

Source: JLL South China Research

Simultaneously, the development of the innovation-oriented industry has spurred the demand for industrial space throughout the entire production process. The R&D and pilot testing stages necessitate greater floor-to-ceiling heights for advanced equipment and laboratory facilities, while the manufacturing stage requires increased load-bearing capacities for large-scale equipment and production lines. A more rational layout also helps to enhance efficiency and facilitate the installation of wastewater and other facilities.

Furthermore, Shenzhen’s next generation industrial park is anticipated to foster collaboration, shorten supply chains, and accelerate technology exchange and application. Also, by leveraging excellent local R&D and innovation capabilities and networks, different industries can form a network of industrial space clusters, thereby integrating upstream and downstream sectors.

The road ahead

The next generation of industrial parks should offer tailored space and services based on the needs of different industries. As a pioneer in industrial park construction, Shenzhen's experience and insights in designing and constructing new types of industrial parks can guide other cities undergoing industrial transformation and upgrading.