THE city's Hongkou District and Hongqiao area in Changning District are emerging as two new sub-central business districts as office tenants start to seek locations away from the center of town amid limited supply and rising rents in core CBD areas, a leading real estate service provider has found.
"Tenants are demanding decentralized locations other than Pudong, fuelling the rise of new sub-CBDs such as Hongkou and Hongqiao," said Remy Chan, regional director of Asia Pacific, Jones Lang LaSalle. "CITIC's projects are putting Hongkou on the map while more high quality supply is set to bring Hongqiao back into the limelight through Metro Plaza, Dawning Center and Gubei Fortune Plaza."
In terms of the total volume, Hongkou is expected to see some 411,000 square meters of Grade A space coming into the market in the next four years whereas about 485,000 square meters' quality supply will become available in Changning during the same period, according to a year-end review released yesterday by Jones Lang LaSalle.
Office rents have been soaring in Shanghai especially in core central business districts including Jing'an, Xuhui, Luwan, Huangpu and Pudong New Area's Lujiazui.
In particular, in the People's Square area and northern Huangpu, recent acquisitions of office towers such as Central Plaza and Cross Tower have pushed the average rents in neighboring areas up by some eight percent in the fourth quarter of last year.
Citywide, total office stock stood at 3.06 million square meters at the end of 2007 with about two thirds in Puxi and overall vacancy remained at 1.6 percent.
For the whole year, rents jumped by 14 percent with those in Pudong rising even faster at 17 percent.
The year 2008 will be a defining year for the local office market with some 845,000 square meters' office spaces due to enter the market, 2.5 times more than usual, Chan added.
As most of it will be in Pudong, rental increases on the east side of the Huangpu River will begin to slow down as landlords experience growing competition from new buildings. However, rents in Puxi are expected to keep rising steadily this year .
Shanghai Real Estate market
Shanghai (Chinese: 上海; Pinyin: Shànghǎi; Shanghainese: /zɑ̃'he/; abbreviation: 沪; nickname: 申), situated on the banks of the Yangtze River Delta in East China, is the largest city of the People's Republic of China and the eighth largest in the world.[4] Widely regarded as the citadel of China's modern economy, the city also serves as one of the nation's most important cultural, commercial, financial, industrial and communications centers. Administratively, Shanghai is a municipality of the People's Republic of China that has province-level status. Shanghai is also one of the world's busiest ports, and became the largest cargo port in the world in 2005.
Originally a fishing town, Shanghai became China's most important city by the twentieth century and was the center of popular culture, intellectual discourse and political intrigue during the Republic of China era. After the communist takeover in 1949, Shanghai languished due to heavy central government taxation and cessation of foreign investment, and had many of its supposedly "bourgeois" elements purged. Following the central government's authorization of market-economic redevelopment of Shanghai in 1992, Shanghai has now surpassed early-starters Shenzhen and Guangzhou, and has since led China's economic growth. Some challenges remain for Shanghai at the beginning of the 21st century, as the city struggles to cope with increased worker migration, a huge wealth gap, and environmental degradation. Despite these challenges, Shanghai's skyscrapers and modern lifestyle are often seen as representing China's recent economic development.
Monday, January 14, 2008
Businesses look elsewhere as rents soar in prime areas
Labels:
Shanghai
