Long halt for Pudong's showcase tower
Completion of the world's tallest building, the Shanghai World Financial Centre in Pudong, has been delayed by at least four years, reflecting deepening problems for the city's property and construction industries.
Tomoshige Yamada, general manager of Mori Corp, which is building the tower, said the company had been forced to seek partners to assist with the project.
The venture had also been made more difficult by the restructuring underway in the Japanese banking industry causing a contraction of operations by some of the country's banks in the mainland.
Construction started on August 27, 1997, and by October last year Mori had sunk 2,000 steel piles, about 76 metres long, to create a stable foundation on which to erect the 460 metre-high office block.
The building - with 94 floors and a distinctive hole at the apex - was due to be finished by the end of 2000.
The cost was forecast at 75 billion yen (about HK$4.86 billion) and Mori has put up a third of the capital and was looking for the rest from its Japanese partners, which included banks and securities and insurance companies.
Last year, Mori said it would hold off beginning the next stage for six months, but now the earliest completion date will be the end of 2004.
'It is very difficult to say now. We need a minimum of five more years,' Mr Yamada said.
Japanese banks have been offloading mainland loans and closing branches in Tianjin, Nanjing and Shenzhen.
In other areas, staff are being cut and some are being moved to Pudong.
'The delay is not a problem of loans or being refused financing. We are intentionally delaying,' Mr Yamada said.
In the Liujiazui financial district in Pudong, average office rents have fallen steeply in the past three years.
About 60 per cent of office buildings are empty.
Mori Corp's Shenmao building is 50 per cent occupied.
Only a third of the plots in the district have been sold and other projects are being stopped or delayed.
'We think it is bottoming out. Next year there will be no new supply coming on the market,' Mr Yamada said.
'In 2004 or 2005 demand will catch up with supply.' At present, tenants are trying to sign leases for as short as one year because they hope for further falls in rents.
In the meantime, Mr Yamada said, Mori was modifying the design of the building, raising the ceilings and planning new lifts and air-conditioning systems.
When the Shanghai World Financial Centre building is completed, its 460 metres will compare with the 452 metre-high Petronas Towers in Kuala Lumpur, the Sears Tower in Chicago at 443 metres and Shanghai's 468-metre television tower.