Agile buys first site in Shanghai for 1.75b yuan
Agile Property Holdings, a Guangdong developer of large-scale residential projects, has made its first acquisition in Shanghai by buying a commercial site for 1.75 billion yuan.
Agile Property plans to develop the 13,192 square metre site in the Huangpu district, a prime shopping area, into a large-scale integrated commercial complex with high-end shops, offices and a five-star hotel.
The Shanghai site is Agile Property's second major purchase outside its base in Guangdong province this year as it pursues its strategy to diversify investments.
Last month, the developer bought 12 sites in Hainan province for 1.01 billion yuan and plans to develop these into a large-scale resort property project.
The Shanghai site purchase 'will increase the group's competitiveness in the property development market by providing the group with a good opportunity to strengthen and diversify its business to other parts of the PRC,' Agile Property said.
Chairman Chen Zhuolin said he expected the commercial property market in Shanghai to grow further because supply of quality offices was limited and the city would host the World Expo in 2010.
The site, at the northwestern side of the Nanjing Road pedestrian walkway in Huangpu, will provide a gross floor area of 114,358 square metres when completed in the middle of 2009.
About one-third of the development will be set aside as retail space and te other half for hotel and office space. The rest will be used as auxiliary facilities such as carparks.
Agile Property did not disclose total investment cost.
The purchase price represented 1,420 yuan per square foot, compared with the selling price of 1,772 yuan per square foot for a site in Hong Qiao, another commercial district in Shanghai, said Jim Yip, director of investment department at DTZ Debenham Tie Leung (Shanghai).
'The site acquired by Agile Property is located at the prime area in Shanghai,' Mr Yip said.
Mr Yip said the site had the potential to be developed into an eight- or nine-storey shopping centre targeting the mass retail market.
Daily office rent in the area is 90 US cents to US$1 per square metre, while daily retail rent in street-level shops reaches US$5 per square metre, according to Mr Yip.
Shares in Agile Property rose 2 per cent yesterday, closing at HK$6.62.