China’s First Industrial Leases Nearing Expiry: Will Foreign Investors Stay Put Amid Renewal Uncertainties?

China's inaugural set of industrial leases are coming to an end. Will the leaseholders opt for renewal?

With the first batch of industrial leases in China reaching their expiration, there is a growing uncertainty about the renewal process and if overseas investors will decide to reinvest.

In 1995, Coca-Cola was keen, or rather very much inclined, to enhance its significant foothold in China.

When it was built back in 1983, the factory in Huangpu district was situated in a comparatively isolated part of the city. It was only the second of its kind on the mainland. However, over the years, the city grew and expanded, eventually enveloping the factory's land. This posed a challenge: a large industrial complex taking up valuable city property.

In order to solve the puzzle, achieve its growth objectives and prolong its stay in what has become one of its biggest markets, Swire Guangdong Coca-Cola recently obtained a 50-year lease for a more extensive piece of land in the same region. The contract, which was signed for approximately 166 million yuan (US$23.6 million), ensures a total land space of 128,000 square meters for the new complex.

The most recent purchase, which shows faith in the country's future, happens as numerous agreements for business and industrial property, attained during the initial phase of China's reform era, are nearing completion.