Commercial property on the upswing
By Victoria Fei |
June 29, 2013, Saturday
|
Print Edition
Print Edition
WITH so much public focus on skyrocketing apartment costs in Shanghai, commercial property has received relatively scant attention.
However, commercial real estate has become something of a buzzword of late in the Minhang District.
By the end of 2015, the district will be home to between five and eight major new commercial buildings. Commercial properties either on the drawing board or under construction total about 14.05 million square meters, almost three times the current level.
Economist Zhang Zhao'an, who edits the Shanghai Economic Yearbook and is a resident of Minhang, has been observing the transformation for decades.
In the 1980s, he did an economic analysis of Minhang. "When I first visited, it was an area of farms," Zhang recalled. "I spent six months there. Conditions were tough."
Emerging district
He said that people, at the time, were becoming aware of the market economy sweeping across China.
"I've watched the district begin to emerge," Zhang said. "The large population that was developing in Minhang created advantages for developing commercial properties. At the same time, improvements in transport were transforming Minhang into a major suburban area of Shanghai."
Currently, most commercial properties in Minhang are based in Hongqiao, Qibao, Xinzhuang and Meilong, and along Metro lines. There is still a gap between the profile of commercial properties in Minhang and those in downtown Shanghai districts such as Jing'an.
"The ones in Jing'an District still outshine the existing properties in Minhang in quality," Zhang said. "In Jing'an, there are Plaza 66, CITIC Square and Westgate Mall, which form an image as a whole. It is not a matter that larger space is better. Minhang needs to strengthen the cluster effect of commercial properties to build its own competitiveness."
Zhang said the modern service industry has great promise in Minhang.
"E-commerce enterprises such as Ctrip.com and Alibaba.com would never locate in a high-cost downtown area," Zhang said. "As labor intensive companies, they prefer larger spaces and lower costs, choosing business sites such as the city of Hangzhou and the suburban Shanghai district of Jiading."
Zhang predicted that the next phase of Shanghai's development would shift emphasis to emerging areas such as former World Expo site, the Hongqiao area and properties on both sides of Huangpu River.
"When the time comes, Minhang District will make great strides in this sector," Zhang said. "Raising the quality of commercial development and attracting enterprises with growth potential should be the priority for Minhang."
The district government would have no quarrel with that.
A seminar on development of commercial property was recently held in the district, underscoring the government's intention of supporting growth in the sector.
Key component
Guo Baoqiang, vice director of Minhang Economic Commission, said an expanded commercial real estate sector is key to raising the overall level of the services industry, a key component of economic development plans.
"It requires us to not only to raise the capacity of existing properties but also to facilitate professional leasing services for new properties," Guo said. "We must provide training to create professional teams of leasing agents and property managers."
The East China headquarters of the Fung Group on Yishan Road has been held up as an example of the benefits of commercial property development in the district.
The company, founded in Guangzhou, capital of South China's Guangdong Province in 2006, is involved in export trading and global supply chain management.
Minhang offered incentives for the then Hong Kong-based group to locate its mainland headquarters in the district. In 13 ensuing years, the group and the site have prospered. The Fung Group is now building a new commercial complex in Hongqiao Town. When completed, it will house 35 companies.
However, commercial real estate has become something of a buzzword of late in the Minhang District.
By the end of 2015, the district will be home to between five and eight major new commercial buildings. Commercial properties either on the drawing board or under construction total about 14.05 million square meters, almost three times the current level.
Economist Zhang Zhao'an, who edits the Shanghai Economic Yearbook and is a resident of Minhang, has been observing the transformation for decades.
In the 1980s, he did an economic analysis of Minhang. "When I first visited, it was an area of farms," Zhang recalled. "I spent six months there. Conditions were tough."
Emerging district
He said that people, at the time, were becoming aware of the market economy sweeping across China.
"I've watched the district begin to emerge," Zhang said. "The large population that was developing in Minhang created advantages for developing commercial properties. At the same time, improvements in transport were transforming Minhang into a major suburban area of Shanghai."
Currently, most commercial properties in Minhang are based in Hongqiao, Qibao, Xinzhuang and Meilong, and along Metro lines. There is still a gap between the profile of commercial properties in Minhang and those in downtown Shanghai districts such as Jing'an.
"The ones in Jing'an District still outshine the existing properties in Minhang in quality," Zhang said. "In Jing'an, there are Plaza 66, CITIC Square and Westgate Mall, which form an image as a whole. It is not a matter that larger space is better. Minhang needs to strengthen the cluster effect of commercial properties to build its own competitiveness."
Zhang said the modern service industry has great promise in Minhang.
"E-commerce enterprises such as Ctrip.com and Alibaba.com would never locate in a high-cost downtown area," Zhang said. "As labor intensive companies, they prefer larger spaces and lower costs, choosing business sites such as the city of Hangzhou and the suburban Shanghai district of Jiading."
Zhang predicted that the next phase of Shanghai's development would shift emphasis to emerging areas such as former World Expo site, the Hongqiao area and properties on both sides of Huangpu River.
"When the time comes, Minhang District will make great strides in this sector," Zhang said. "Raising the quality of commercial development and attracting enterprises with growth potential should be the priority for Minhang."
The district government would have no quarrel with that.
A seminar on development of commercial property was recently held in the district, underscoring the government's intention of supporting growth in the sector.
Key component
Guo Baoqiang, vice director of Minhang Economic Commission, said an expanded commercial real estate sector is key to raising the overall level of the services industry, a key component of economic development plans.
"It requires us to not only to raise the capacity of existing properties but also to facilitate professional leasing services for new properties," Guo said. "We must provide training to create professional teams of leasing agents and property managers."
The East China headquarters of the Fung Group on Yishan Road has been held up as an example of the benefits of commercial property development in the district.
The company, founded in Guangzhou, capital of South China's Guangdong Province in 2006, is involved in export trading and global supply chain management.
Minhang offered incentives for the then Hong Kong-based group to locate its mainland headquarters in the district. In 13 ensuing years, the group and the site have prospered. The Fung Group is now building a new commercial complex in Hongqiao Town. When completed, it will house 35 companies.
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