Ryoden in Shanghai rethink
Ryoden Development says it may change the proposed office section in the second phase of its Gateway Plaza in Shanghai to other uses because of a glut in supply.
Executive director Tony Leung Ka-tung said the design for the second phase included an office building above a retail podium, to provide 500,000 square feet of floor space.
'The retail podium is now under construction as the demand for retail space remains strong,' Mr Leung said.
'But we will not rule out the possibility of changing the office element in the development for other usage.' No decision had been made, but it would not be a problem to change the office section into serviced apartments or a hotel.
Gateway Plaza, a residential-commercial development in which the company has a 23.1 per cent stake, is being developed in three phases with floor area totalling 2.38 million sq ft.
Its partners include Shun Hing China Investment, Peace Town (China), Simatelex Manufactory Co and two Shanghai companies.
Mr Leung said the second phase was expected to be completed in two years.
The company planned to release the remaining 400 first-phase units - either for residential or office use - at discounted prices soon.
To boost sales, Ryoden also would provide preferential financing.
The pricing had yet to be finalised, he said.
Mr Leung said he believed the regional financial turmoil would not dampen foreign-investor interest in Shanghai because the port city was seen as a strategic mainland location.
The first batch of Gateway Plaza's 600 first-phase units had averaged about US$120 per sq ft. The units measured 1,300 sq ft each.
He expected units in the development would each be capable of generating a monthly rental of between $1,500 and $1,800.
Ryoden also was negotiating with a food operator about taking up more than 10,000 sq ft of retail space at its other joint venture office-commercial development in the city, Shanghai Square, he said.
About 60 per cent of Shanghai Square's 400,000 sq ft of retail space was leased at a rental rate of between $2.70 per sq ft per month and $8.30 per sq ft per month, he said.