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Infrastructure Projects in China's Pearl River Delta to Boost Local Economies

Future cross-border infrastructure will enhance people, capital, and trade flows between Hong Kong and mainland China, according to CBRE's Greater Pearl River Delta Infrastructure Outlook report, which examines how infrastructure projects in the Greater Pearl River Delta (GPRD) will foster long-term development in the commercial real estate market and contribute to regional economic development. Main suppliers

"The GPRD is strategically located on China's'southern gate,' which links the country to the rest of the world. This, combined with the international business climate and government funding, gives the GPRD area a bright future "CBRE Hong Kong, Southern China, and Taiwan's Head of Research, Marcos Chan, said.

The GPRD's ongoing and planned infrastructure projects, which include many large-scale cross-border infrastructure projects implemented by the Hong Kong government, as well as a number of high-speed railway, intercity trains, and highway construction projects in cities like Guangzhou, Foshan, and Shenzhen, will be critical in driving city integration by enhancing the flow of capital, people, and goods.

"New infrastructure programs will help to better allocate capital in the GPRD, which will help to reduce Hong Kong and Macau's space and resource shortages. Traditional companies would also profit from their assistance in transforming and moving up the value chain. Furthermore, improved transportation will hasten urbanization in peripheral cities while alleviating the pressures that come with megacities "Mr. Chan said.

One example of how new infrastructure can benefit the region's commercial real estate market is the Guangzhou-Shenzhen-Hong Kong Express Rail Link. If more Chinese companies seek internationalization, more mainland companies will grow in Hong Kong, resulting in long-term demand for office space. The Express Rail Connection would reduce travel time between Hong Kong, Shenzhen, and Guangzhou from over two hours to one hour for business travelers.

"The one-hour commuting circle between metropolitan areas and the two-hour commuting circle across the region would make it more feasible for businesses in Hong Kong to relocate their middle or back office operations to major PRD cities. It will also facilitate two-way labor mobility between Hong Kong and the rest of the Chinese mainland "Mr. Chan said. "It will increase demand for office space in and around West Kowloon by providing a convenient and fast mode of transportation between Hong Kong's West Kowloon and Guangzhou via Shenzhen. It will also encourage regular travel and bridge the lifestyle divide between Hong Kong, Macau, and PRD cities."

This type of infrastructure development would aid the region's growth as an international megalopolis. Unlike other Chinese megacities, the GPRD has three major economic centers: Guangzhou, Shenzhen, and Hong Kong, all of which are working together to propel the region toward becoming a central economic hub for China as a whole.

"The construction of the Guangdong Free Trade Zones will be aided by enhanced transportation infrastructure, which will provide seamless connections to Hong Kong and Macau, effectively accelerating population growth and improving the region's productivity. The GPRD will develop into a world-class megalopolis, attracting high real estate occupier demand and providing enormous opportunities for property investors "Mr. Chan added.

Beyond China, the GPRD will be critical to China's Belt and Road plan, which will see a large number of new cross-border infrastructure projects built across Asia, the Middle East, Africa, and Europe. CBRE predicts that the GPRD will provide project engineering, arbitration, insurance, legal, and other professional services for the Belt and Road initiative, based on its extensive expertise in the construction and operation of cross-border infrastructure.

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