Is Huawei “Fleeing” Shenzhen Due to Sky-high Housing Prices?

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Domestic media reports that telecommunications giant Huawei Technologies Co. is moving key staff and facilities from the southern Chinese commercial hub of Shenzhen to the adjacent city of Dongguan, due to concerns about sky-high housing prices in its current headquarters.

Hexun.com reports that 2700 of Huawei’s staff from its research and other departments have officially moved from Shenzhen to the Songshanhu district of Dongguan city, with a further 3000 and 8000 staff set to follow them at the end of July and the end of August respectively.

While Huawei itself has said that the company’s headquarters will remain in Shenzhen, many domestic observers say that the telecommunications giant has “fled” the southern Chinese tech hub due to the high cost of real estate.

Huawei began to lay the foundations for a mass staff relocation in 2012 with the establishment of Huawei Zhongduan (Dongguan) (华为终端(东莞)), followed by the construction of facilities in the Songshanhu district in 2014.

While Huawei CEO Ren Zhengfei said at the time that the lack of large-scale industrial land in Shenzhen was a factor behind the move, reports claim that he is also concerned about the implications of high housing prices for the company’s staffing costs.

Figures from Creprice.cn indicate that Shenzhen’s pre-owned housing prices posted a year-on-year rise of 6.82% over the past month to hit 56,000 yuan per square metre (approx. USD$8,451.80), while rental levels posted a YoY increase of 29.76% to hit 78.35 yuan/ month/ square metre.

In Dongguan, however, which is situated at just a 50 kilometre remove, pre-owned housing prices stand at 16,100 yuan per square metre, while rent is 28.51 yuan/ month/ square metre.