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Hongqiao development holds mirror to city's future
By Shaun Brodie |
March 13, 2012, Tuesday
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Print Edition
Print Edition
THE development and construction of the Hongqiao Central Business District is a strategic decision by the central government for the further development of Shanghai.
The overall project will enhance the city's urbanization, help Shanghai achieve greater integration within the Yangtze River Delta economy and open up opportunities to promote increased domestic consumption.
As an adjunct to development of the CBD, the Hongqiao (or Rainbow Bridge) Transportation Interchange, located on the Changning-Minhang district border, was constructed about 12 kilometers from Shanghai's city center.
Work on the transport hub started in 2006 and was completed just before the start of the World Expo 2010 in Shanghai.
This 1.5 million-square-meter project created the first and only transportation hub in the world to integrate and connect air, high-speed rail, metro and road transport all in one place and all within five to 10 minutes walking distance of one another.
Moreover, once the existing maglev line is extended to the hub, Hongqiao is expected to be the first and only hub of its kind in the world to also include this mode of mass transportation.
In 2011, the average daily passenger rate through the hub was 499,000 people. This figure is expected to conservatively increase to 1.1 million people a day by 2020.
Engine of growth
Capitalizing on the interchange's potential passenger flow, the Shanghai municipal government in 2009 set the development of the 86 square-kilometer Hongqiao CBD as a major component in its 12th Five-Year Plan.
Under the plan, the Hongqiao CBD will incorporate parts of Minhang, Changning, Qingpu and Jiading districts.
The main functional area of the Hongqiao CBD will cover 27 square kilometers and will include the Hongqiao Transportation Interchange and the Core Commercial Area.
The remaining 59 square kilometers will be the Zoned CBD Expanded Area, which is broadly defined as the north, south, east and west Hongqiao areas.
With the expected ease of transportation and large flow of people, this project is expected to be the next engine of growth for modern service industries as well as domestic and international trade in Shanghai.
In just three years, the Hongqiao CBD Core Commercial Area will surpass all other Shanghai districts, except the Pudong New Area, in terms of Grade A office space.
By 2015, the area now under construction in a 4.7 square kilometer zone, will contain 2.61 million square meters of Grade A offices, which is equivalent to 24 percent of office space of that level expected to be available.
Our calculations show that will equate to an office population of 174,013 people in the area, excluding the jobs that will be created by the transportation hub that is part of the plan, along with service jobs, such as in hotels and in retail in the commercial area.
The Shanghai municipal government is planning for wholesale trade and professional service industries to grow at an average annual rate of 15 percent, and that is expected to help drive office demand in the Hongqiao CBD Core Commercial Area within the next five to 10 years.
This double digit growth estimate is reinforced by our research, which shows that Shanghai is still very much behind international standards of developed cities regarding the proportion of the workforce employed within these two industries.
As with any locality or office development, there will always be some limitations regarding the specific requirements of some individual occupiers to location and/or to office space.
Solid demand
However, all in all, the accelerating service provider and wholesales trading industries in Shanghai, the outstanding local transportation infrastructure at hand as well as an expected improved domestic and global economy by 2015 should see solid demand for Grade A office space within the Hongqiao CBD Core Commercial Area.
What is more, by 2015, the rental in this area is expected to be lower than many of the prime central CBD areas in Shanghai, such as the Jing'an District.
This, coupled by the expected high quality office space offering, will see a good number of occupiers setting up offices for the first time in or moving from some of the more centralised areas within the city to the Hongqiao CBD Core Commercial Area as the future business environment enhances and commercial opportunities abound.
The overall project will enhance the city's urbanization, help Shanghai achieve greater integration within the Yangtze River Delta economy and open up opportunities to promote increased domestic consumption.
As an adjunct to development of the CBD, the Hongqiao (or Rainbow Bridge) Transportation Interchange, located on the Changning-Minhang district border, was constructed about 12 kilometers from Shanghai's city center.
Work on the transport hub started in 2006 and was completed just before the start of the World Expo 2010 in Shanghai.
This 1.5 million-square-meter project created the first and only transportation hub in the world to integrate and connect air, high-speed rail, metro and road transport all in one place and all within five to 10 minutes walking distance of one another.
Moreover, once the existing maglev line is extended to the hub, Hongqiao is expected to be the first and only hub of its kind in the world to also include this mode of mass transportation.
In 2011, the average daily passenger rate through the hub was 499,000 people. This figure is expected to conservatively increase to 1.1 million people a day by 2020.
Engine of growth
Capitalizing on the interchange's potential passenger flow, the Shanghai municipal government in 2009 set the development of the 86 square-kilometer Hongqiao CBD as a major component in its 12th Five-Year Plan.
Under the plan, the Hongqiao CBD will incorporate parts of Minhang, Changning, Qingpu and Jiading districts.
The main functional area of the Hongqiao CBD will cover 27 square kilometers and will include the Hongqiao Transportation Interchange and the Core Commercial Area.
The remaining 59 square kilometers will be the Zoned CBD Expanded Area, which is broadly defined as the north, south, east and west Hongqiao areas.
With the expected ease of transportation and large flow of people, this project is expected to be the next engine of growth for modern service industries as well as domestic and international trade in Shanghai.
In just three years, the Hongqiao CBD Core Commercial Area will surpass all other Shanghai districts, except the Pudong New Area, in terms of Grade A office space.
By 2015, the area now under construction in a 4.7 square kilometer zone, will contain 2.61 million square meters of Grade A offices, which is equivalent to 24 percent of office space of that level expected to be available.
Our calculations show that will equate to an office population of 174,013 people in the area, excluding the jobs that will be created by the transportation hub that is part of the plan, along with service jobs, such as in hotels and in retail in the commercial area.
The Shanghai municipal government is planning for wholesale trade and professional service industries to grow at an average annual rate of 15 percent, and that is expected to help drive office demand in the Hongqiao CBD Core Commercial Area within the next five to 10 years.
This double digit growth estimate is reinforced by our research, which shows that Shanghai is still very much behind international standards of developed cities regarding the proportion of the workforce employed within these two industries.
As with any locality or office development, there will always be some limitations regarding the specific requirements of some individual occupiers to location and/or to office space.
Solid demand
However, all in all, the accelerating service provider and wholesales trading industries in Shanghai, the outstanding local transportation infrastructure at hand as well as an expected improved domestic and global economy by 2015 should see solid demand for Grade A office space within the Hongqiao CBD Core Commercial Area.
What is more, by 2015, the rental in this area is expected to be lower than many of the prime central CBD areas in Shanghai, such as the Jing'an District.
This, coupled by the expected high quality office space offering, will see a good number of occupiers setting up offices for the first time in or moving from some of the more centralised areas within the city to the Hongqiao CBD Core Commercial Area as the future business environment enhances and commercial opportunities abound.
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