Retail companies, be warned - land inflation (and, by turn, prime
rental space rates) in Shanghai continues to spiral upwards after
Shenzhen-listed real estate company Suning Universal smashed
Shanghai's land price record on Friday. By outbidding rivals, it
agreed to pay RMB4.4bn for a 13,709-square-meter plot in Huangpu
District. The land, located on East Nanjing Road, is slated to become
a commercial and office development.
Suning beat out nine other competitors - including Hong Kong property
developer Wharf Holdings, Sun Hung Kai and Tishman Speyer - and, based
on the project's gross floor area, will pay nearly RMB67,000 per
square meter, more than double market estimates.
"The final price for the land plot, even taking its prime location
into account, surprised me," Remy Chan, National Director of Jones
Lang LaSalle, told Shanghai Daily. "However, the winner, compared with
the other bidders, boasts superior retail experience in the local
market, and that could help explain its strong confidence in the
project."
Colliers International agreed that the inflationary effect reflects
ongoing strong demand for office space in the city, as well as the
scarcity of premier quality office/retail sites in the downtown Puxi
area. And, due to limited new supply in the coming years, rents for
premium office developments in prime locations are projected to rise
by 20 per cent annually.
Last update : Saturday, 25 August 2007
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