BUSINESS

China’s Cities Offer Rent-Free Industrial Parks in Battle to Lure Startups

Published: Aug. 21, 2025 3:32 a.m. GMT+8

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State-owned industrial parks are offering free rents to tech startups.

China’s biggest cities are offering companies free rent in industrial parks as they compete to lure startups and advanced manufacturers, igniting what local officials are calling a “city war” for top-tier enterprises.

Since March, Shenzhen, Hangzhou, Guangzhou, Huizhou and Suzhou have all launched “zero-rent” policies, waiving lease costs for two to five years in selected state-owned industrial parks. The programs aim to cutting expenses for tech firms and fill empty space left after years of overbuilding.

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Major Chinese cities like Shenzhen, Guangzhou, and Hangzhou offer 2–5 years' free rent in industrial parks to attract startups amid competition and surplus space.
Traditional incentives were banned by a June 2024 State Council regulation, prompting cities to adopt "zero-rent" policies; national industrial park vacancy rates stand at 30–50%.
For example, Shanghai's industrial park vacancy reached 29.2% in H1 2025, while Shenzhen's was 22.1%, with oversupply expected to continue through 2028.

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Who’s Who

Colliers International: Colliers International reported that in the first half of 2025, Shanghai saw 500,000 square meters of new industrial park space but absorbed only 67,000 square meters. This led to a vacancy rate increase to 29.2%, marking the 12th consecutive quarter of rising vacancies.

Mingyuan Real Estate Research Institute: The Mingyuan Real Estate Research Institute indicates that national industrial park vacancy rates in China range from 30% to 50%. In some suburban areas, over half of the industrial space remains unused.

Cushman & Wakefield: Cushman & Wakefield is a real estate services company. Data from Cushman & Wakefield was used to report on industrial park vacancy rates in China. They found national vacancy rates hover between 30% and 50%, with some suburban areas having over half of their space unused.

AI generated, for reference only

What Happened When

Since 2020：: Suzhou's industrial park rents have dropped about 30%, but many buildings remain vacant.

June 2024：: State Council regulation enacted banning cheap land, tax benefits, and direct subsidies as incentives.

March 2025：: Shenzhen’s state asset regulator launched a 'zero-rent' policy, offering 100,000 square meters of space in city-owned parks.

April 2025：: Suzhou and Chengdu offered 100,000 and 50,000 square meters of free industrial park space, respectively.

First half of 2025：: Shanghai added 500,000 square meters of new industrial park space, but absorbed only 67,000. Vacancy rate climbed to 29.2%.

First half of 2025：: Shenzhen leased 220,000 square meters of industrial park space, cutting vacancy to 22.1%.

By July 2025：: Hangzhou unveiled its 'Seedling Plan,' pledging at least 200,000 square meters of state-owned space rent-free for up to five years.

July 31, 2025：: Guangzhou’s Development Zone and Huangpu District announced 13 pilot sites offering special rental arrangements: two free years on a three-year lease, three free years on a six-year lease.