APAC-BFSI-Outlook-2017

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Shanghai: New CBDs
Shanghai, mainland China’s financial
center, is evolving rapidly. As the city’s
breakneck development has turned
its core CBD areas into mature hubs
of Grade A oŸce space, new business
districts are emerging in decentralized
or non-core locations to accommodate
the growing needs of domestic and
foreign firms. Shanghai’s traditional
downtown submarkets of Lujiazui,
New Huangpu, Jing’an and Xuhui are
experiencing tight availability rates –
in the case of Lujiazui, the center for
banking and financial services, at just
3.4%. The other CBD areas cater to a
more diverse mix of domestic and MNC
tenants, including companies in the
consulting, professional services, legal
and retail sectors. For the most part,
available space in these submarkets
is also quite constrained and as
Shanghai’s service sector continues
to grow at a blistering pace, demand
should continue to spill over into the
emerging CBDs where the bulk of new
high-quality oŸce space will come on
stream, as well as the business parks
that surround the city’s core.
Some 90 million sf of Grade A oŸce
space is projected to launch in
Shanghai during the second half of
2016 through 2021, more than doubling
the current supply. The majority of
this (57 million sf) will hit the market
in suburban or decentralized areas
of Shanghai. Municipal government
plans call for intensive development of
key emerging CBD areas such as the
Hongqiao Central Business District,
the North Bund area, and the Qiantan
International Business Zone. Of these,
the Qiantan zone located south of the
former World Expo site is perhaps the
most promising alternative location
to Lujiazui. Still in the early phases
of development, the well-connected
zone is within easy reach of downtown
Lujiazui and will be home to major
mixed-use complexes from developers
including, Swire Properties and Tishman
Speyer.
FUTURE HUBS
An Inevitable Evolution
As Asia’s economies grow in stature and sophistication and companies grapple to establish a
presence in its cities, it is only natural that space at its conventional business districts would
reach its limits. While cost rationalization is a key objective for corporates to relocate to the
periphery, within these objectives, greater mobility due to the build-out of infrastructure
networks is making secondary oŸce markets more viable. The emergence of a well-defined
decentralized Grade A oŸce market is the next step in the evolution of the region’s hubs.
SHANGHAI, CHINA
40 ASIA PACIFIC BFSI OUTLOOK 2017