SHANGHAI'S real estate market has so far remained unscathed by the subprime crisis in the United States as almost all sectors, especially the office sector, continued to see strong sentiment, one of the world's big five real estate firms said yesterday.
"The effects of the subprime crisis do not seem to have dampened demand for office space and rental increases of three percent were each recorded in Puxi as well as in Pudong in the first quarter, even as the latter is seeing a period of large new supplies,'' said Kenny Ho, head of research for Jones Lang LaSalle China.
Demand in Shanghai continued to be strong as tenants in the service sector pushed ahead with robust expansion plans. Statistics showed nearly 50 percent of the space in Pudong New Area's new buildings have already been committed by both joint-venture and domestic companies.
In particular, domestic financial services firms are reaping the benefits of last year's bull market with some upgrading from Grade-B offices to premium Grade-A properties.
On the retail front, the average rent for food and beverage retailers in the city's prime malls nearly doubled over the past two years. Plaza 66, a top retail mall in the city, plans to subdivide the fifth floor into smaller units for F&B tenants and double the rent to 10.5 yuan per square meter per day when leases expire.
Citywide, overall rent for retail spaces rose four percent in the first quarter due to tight supply. The industrial property market saw strong deals including land purchases, acquisitions and leasing.