The “Rail plus Property (R + P)” model applied to Shenzhen Metro is it sustainable and replicable? An analysis of Congcong Li (Research Unit Géographie-Cités, Université Paris 1 Panthéon-Sorbonne, Campus Condorcet, France) and Natacha Aveline-Dubach (CNRS, Research Unit Géographie-Cités, Université Paris 1 Panthéon-Sorbonne, Campus Condorcet, France) published in Land review.
Shenzhen Metro cco pexels William Xin
Land Value Capture (LVC) is increasingly being emphasized as a key mechanism for financing mass transit systems, promoted as a sustainability-oriented policy tool amid tightening public budgets. China has adopted a development-led approach to value capture through the “Rail plus Property (R + P)” model, drawing inspiration from the Hong Kong experience. The Shenzhen Metro’s “R + P” strategy has been widely acclaimed as the key to its reputation as “the only profitable transit company in mainland China without subsidies.”
This paper questions this assumption and argues that the Shenzhen model is neither sustainable nor replicable, as its past performance depended on two exceptional conditions: an ascending phase of a real-estate cycle and unique institutional concessions from the central state. To substantiate this argument, we contrast Shenzhen’s value capture strategy with that of Nanjing—a provincial capital operating under routine institutional conditions, with governance and spatial structures broadly reflecting the prevailing urban development model in China.
Using a comparative framework structured around three key dimensions of LVC —urban governance, risk management, and the transit company’s shift toward real estate— this paper reveals how distinct urban political economies give rise to contrasting value capture approaches: one expansionary, prioritizing short-term profit and rapid scale-up while downplaying risk management (Shenzhen); the other conservative, shaped by institutional constraints and characterized by reactive, incremental adjustments (Nanjing). These findings suggest that while LVC instruments offer valuable potential as a funding source for public transit, their long-term viability depends on early institutional embedding that aligns spatial, fiscal, and political interests, alongside well-developed project planning and capacity support in real estate expertise.
We apply a comparative framework centered on three main contextual factors: governance, risk management, and the transit company’s shift toward real estate. The results reveal how local urban political economies shape divergent value capture trajectories: one expansionary, driven by short-term returns and rapid scaling under exceptional coordination; the other more conservative, constrained by fragmented governance and marked by incremental, reactive adjustments. The study revisits the mainstream “successful narratives” in the LVC literature through the lens of these institutional tensions, which produce partial and unstable outcomes. We argue that while LVC instruments offer valuable potential as a funding source for public transit, their long-term viability depends on early institutional anchoring that aligns spatial, fiscal, and political interests—supported by a balanced approach and access to development capacity in real estate.
Introduction
LI Congcong is a doctoral student at the Université Paris 1 Panthéon-Sorbonne , UMR 8504 Géographie-cités under the supervision of Natacha Aveline. Her thesis, Institutional Mechanism of Land Value Capture in Transport Development–the Case of China, studies how local governments in China manage to finance construction of metro lines through real estate operations in stations and their surroundings. It consists of comparative study of the case of Shenzhen—a city with exceptional political and financial autonomy and Nanjing–which is more representative of the majority of Chinese cities.
Natacha Aveline-Dubach
“My research focuses on the political economy of real estate, particularly in North-East Asia (Japan, Hong Kong, China). I have explored the relationships between land/real estate cycles, government policies and the socio-material forms of the built environment (including funeral artefacts) in several urban regions. My recent research addresses the financialisation of real estate and land value capture mechanisms applied to railway infrastructure. I am also Lead PI of the French-Singaporean SPACE project which analyses the risk factors and sociospatial patterns of infectious diseases (dengue and COVID 19) in Singapore’s urban environment. This project is co-led by Shirley Ho at NTU and funded by the Singapore National Research Foundation under the Create Campus for Research Excellence and Technological Enterprise.”
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