THE positioning of thousands of businesses in Shanghai has reshaped and unified five districts, namely Jing'an, Xuhui, Luwan, Huangpu and Lujiazui in Pudong New Area, to form the city's core central business district, or Core CBD, an industry white paper has concluded.
According to the paper, "The Emergence of the Core - Redefining Shanghai's CBD," released yesterday by Jones Lang LaSalle, a real estate services provider, an additional three million square meters of Grade-A office space will be available in the city over the next four years. The report said 60 percent of these confirmed projects will be inside the Core CBD.
"The city planners created the pieces of a puzzle in their race to secure prime real estate status, but it is the market which has put these pieces (districts) of quality property together," Anthony Couse, managing director of Jones Lang LaSalle, Shanghai, noted.
"If 'location, location, location' are the three keys to success in business, then defining location in a market as complex as Shanghai is invaluable to both tenants and investors."
It was a very contrasting situation 15 years ago when being in Shanghai meant just in Hongqiao or the Shanghai Center. But by the late 1990s, these two venues were no longer the only location choices.
Since then, pockets of new office developments had started to appear in five districts around the city and finally led to the emergence of a single, unified Core CBD.
In Jing'an District, a growing selection of premium office buildings and luxury retail facilities propelled the Nanjing Road W. area toward maturity by the early 2000s. The so-called "Golden Triangle" brought together the highest quality premium office and retail properties in Shanghai, becoming home to a cluster of international professional service providers and deluxe brands.
Meanwhile, the same thing happened along Huaihai Road in Luwan District and the completion of Xintiandi just helped boost its attractiveness, and People's Square in Huangpu District emerged in the early 2000s clustered around four major Grade-A properties. Moreover, as the city grew westward, the Xujiahui area also formed a separate cluster.
The fifth piece of Shanghai's Core CBD is geographically separate from the rest, however. Across the Huangpu River, Lujiazui on the highly developed tip of Pudong now boasts a concentration of Grade-A office space - with more than 700,000 square meters nestled within a 1.7-square-kilometer area.
Though today's Core CBD would have been impossible to imagine 15 years ago, it is rather easier to predict what it will look like five years from now as foundations have been laid, the Jones Lang LaSalle white paper said.
Continued in-fill development of mixed-use projects and amenities will fuel above-average performance in rents and attract high-caliber tenants seeking high profile locations, while occupiers will be able to enjoy an increasingly wide selection of hotels, restaurants and retail facilities.
The report sees the Lujiazui area expanding eastward to accommodate the booming financial sector, with the prime expansion areas being north of Century Avenue, south of Pudong Avenue, east of South Pudong Avenue and west of Laoshan Road.
By 2010, it is predicted that more than 600 financial institutions will employ some 200,000 staff in the area and the financial industry will account for more than 18 percent of Lujiazui's total gross domestic product.
The gaps that still exist in the Core CBD between the People's Square area and Lujiazui will continue to be closed through the retrofitting of buildings and the provision of premium facilities there.