Center

Business district to expand

By Yin Ping (China Daily)
Updated: 2006-08-29 09:13

More and more services companies, including financial institutions, are rushing to the bustling city centre, pushing up the cost of grade-A office space.

Daily rent in the area is around 88 US cents per square metre, while it is 91 US cents per square metre in Puxi on the western side of the Huangpu River.

Rents are highest in Jing'an District, at US$1.06 per square metre a day.

"Available office space in Xiao Lujiazui's grade-A offices is at a historic low," according to Michael Hart, head of research global real estate services provider Jones Lang LaSalle Greater China.

Space is in short supply across the city and no buildings have been completed in Xiao Lujiazui over the past six months, he said.

Hart attributes this shortage of space in Xiao Lujiazui to the lack of space to develop in other parts of the city.

"What Xiao Lujiazui has are a number of sites ready for development since they have been cleared and no residents need to be relocated," Hart said.

In addition, Xiao Lujiazui offers a concentrated area of grade-A offices.

According to Hart, Xiao Lujiazui has about 33 per cent of the city's grade-A offices.

This ratio is set to rise to 45 per cent by 2010.

"This means while other areas are still important, Xiao Lujiazui will be the undisputed centre of commerce in the city," he said.

A report from international property consultants and estate agents Savills shows that by the end of 2008, 12 more grade-A office buildings will be completed in the Lujiazui Finance and Trade Area, offering more than 927,000 square metres of office space.