CREATIVE industry parks were launched with much fanfare in recent years and popped up everywhere in old factories. But the economic downturn has impacted most of them, Nie Xin reports.

Shanghai may not be the most fashionable - Paris and Milan lead; Shanghai perhaps isn't the best gourmet choice - there are renowned Cantonese and Sichuan cuisines.

But our fair city is up near the top when it comes to creative industry parks, according to a recent report from the Shanghai Creative Industry Center.

There are 75 creative parks authorized by the Shanghai Economic Committee, with another 200 awaiting approval, according to He Zengqiang, secretary-general of Shanghai Creative Industry Center.

But faced by the global economic downturn, these parks are reassessing the outlook, redefining their target audience, repositioning and reinventing themselves.

Occupancy has fallen in the past year - some art studios and galleries close, fewer events are held in the spaces once intended for brand launches.

Higher-end rents are going down, others are holding steady. They're definitely not going up. Super-artsy doesn't make much money.

Whether all or even most of the 200 creative industry parks will open is an open question.

Among all these parks, centers and hubs, around two-thirds are renovated factories and warehouses.

The rough or deco ambience is sought after by companies featuring fashion, media, technology, arts, design and entertainment outlets. They like being considered "creative."

Are they creative enough?

How are they faring in the economic downturn?

A new creative center in an old TV factory, SVA Yuejie, opened at the beginning of this year in Xuhui District.

Yuejie means "beyond boundaries." The old Shanghai Jinxing (Golden Star) Television Factory site is on Tianlin Road, near the Caohejing area.

While some factory-turned-creative-parks' management worry about occupancy, rent and customer flow, this one doesn't, says Carl Tsui, vice general manager of SVA Creativity Corp Management Co. Unlike many other hubs, it's not super-artsy and its target customer is different.

In just a couple of months, Yuejie has attracted offices, a gym, a cinema, restaurants, cafes and other facilities, Tsui says. Unlike other creative centers that focus on art and design studios and galleries, SVA Yuejie's main space is office. The park covers 100,000 square meters; 70 percent is office space.

Besides targeting a different client, it offers relatively lower rental and a natural environment that includes 30-year-old trees in large green space. Many former factories don't have much green space.

Office space there currently goes for 2.5 yuan (30-60 US cents) per square meter per day. Comparable office space near Xujiahui area is around 10 yuan per square meter per day.

The factory renovation trend really took off in 2004 when the decorators moved in.

At the end of the 19th century, Shanghai's industrial and urban structures were being transformed. Many factories shifted from downtown to rural and suburban areas and old plants were left vacant.

In 1995, the Shanghai Economic Committee began reconstruction of industrial buildings and set out policies for creative industry spaces.

One of the first and most famous is the art hub M50 (50 Moganshan Road) along the Suzhou Creek.

Rent was cheap in the old Shanghai Chun Ming Textile Factory and many artists opened studios in the 1990s.

When it became an official creative industry park in 2002, more than 100 galleries and studios were operating and still are. It attracted artists - and tourists - from all over the world.

Now the hungry artists have moved out, the richer folks and tourists have taken over.

In 2005, 18 creative parks opened in Shanghai.

In addition to M50, there are others along the Suzhou Creek, Tian Zi Fang on Taikang Road, Red Town on Huaihai Road W., 1933 Old Millfun in Hongkou District and Bridge 8 on Jiangguo Road M.

"Creative industry is a name card for Shanghai," says He of the Shanghai Creative Industry Center. "They seemed to become popular overnight, but problems arise when too many competitors are striving in the same field and economic conditions are not ideal. That's especially so in the arts that are influenced by the global financial crisis."

Highstreet Loft on Jianguo Road W., near Jiashan Road, in Xuhui District opened in December 2008.

It's the site of the Shanghai Textile Group's Shanghai No. 9 Knitting Factory that produced underwear for the famed Three Guns brand.

It took a year to plan and another year for reconstruction. "The idea was to establish a SOHO in Shanghai's center by using the powerful background of our textile group and attracting fashion labels," says Ma Ni, vice general manager of Shanghai Highstreet Loft Investment Co.

Culture, history and location are important factors when investors consider possible sites. The oldest structure in Highstreet Loft was built in the 1920s.

"The arts atmosphere is hard to copy," says Ma.

In early 2007, the occupancy rate of creative industry parks was over 90 percent, but it dropped to 80 percent in one year, according to He.

Many fashion shops and design studios left when they found the location unsuitable.

"Customer flow is vital to fashion stores that depend on sales, but Highstreet Loft can't provide so much," says Ma.

After many changes, the concepts of "showroom" and "fashion social" have evolved in this old factory creative space.

"Highstreet is not a place people go only for shopping, it's also the site of a fashion social," says Ma. Enjoying a cup of coffee in a relaxing atmosphere and checking out the latest fashion trends are what's on offer.

As creative parks seek to differentiate themselves and better target their clients, they also face the problems of the worldwide financial crisis.

Rents and occupancy go down.

An example is the famous old abattoir 1933 Old Millfun in northeastern Shanghai's Hongkou District.

It has a glorious dome and open space, ideal for galas and special events.

It used to be the Shanghai Industry Bureau Slaughter House.

During the entire year of 2008, however, only 35 events were held there.

"It can generally hold two events for international labels every month," says He of the Shanghai Creative Industry Center. "However, it will be very hard to hold this kind of event now, due to the financial crisis."

Red Town on Huaihai Road W. arose in 2006 in the warehouses of an old steel factory.

It's adjacent to the Shanghai Sculpture Space and features sculpture, arts and advertising.

With a good location in city center and the arts and culture theme, the average rent in Red Town is about 10 yuan per square meter per day.

"The current situation is quite stable, but we are ready to make appropriate (downward) adjustments due to market conditions," says Zheng Peiguang, chairman of Red Town.

"I don't know how much the price will decrease, but I'm sure it will definitely not increase in the near future," he says.

In Highstreet Loft, the average rent in 2008 was 4.69 yuan per square meter per day. Ma doesn't dispute that fees may well decrease because of the economic slowdown.

But she is still very confident of the future of Highstreet.

"The vital elements for survival of a creative industry park are still accurate targeting, developing direction and management," she says.

The financial crisis may create opportunities for creative industry parks with lower rentals, compared with office and apartment buildings.

"When a commercial company considers moving to a cheaper office, perhaps Highstreet will be a good choice," says Ma.

In spite of difficulties, creative industry parks are still promoted by government bodies and favored by many investors.

"To remodel old factories for use as creative parks is a good investment, due to the lower investment," says Tsui of SVA Yuejie, which began reconstruction in July 2007 and was completed in early 2009. Creative centers M50

Featuring more than 100 galleries and design studios and artists from many parts of the world. Formerly Shanghai Chun Ming Textile Factory.

Address: 50 Moganshan Rd, Putuo District 1933 Old Millfun

Featuring art galleries, studios, social events and forums. Formerly the Shanghai Industry Bureau Slaughter House

Address: 10 Shajing Rd, Hongkou District Bridge 8

Featuring art studios. Shanghai No. 1 Art Museum is nearby. Formerly the Shanghai Automobile Brake Co.

Address: 8 Jianguo Rd M., Luwan District Tian Zi Fang

Featuring arts and crafts, galleries including Chen Yifei Studio and photographer Deke Er Art Center. Many residents still live in upper stories.

Address: 210 Taikang Rd, Luwan District Fahua 525 Creative Forest

Featuring Buddhist culture and old residential architecture. Formerly a clothing factory and the site of old Fahua Temple.

Address: 525 Fahuazhen Rd, Changning District Red Town

Featuring sculpture, art exhibitions and creative advertising. Shanghai Sculpture Space and Exhibition area is adjacent. Formerly the Shanghai No. 10 Steel Factory.

Address: 570 Huaihai Rd W., Changning District