Site purchases bolster Pudong's hub status
Pudong's reputation as Shanghai's financial hub has received another boost with three sites in the area sold to the Shanghai Stock Exchange, the China Securities Depository and Clearing Corp and the China Financial Futures Exchange.
The sites, next to each other in Zhuyuan Park Commercial District's ZoneA, sold for a combined 2.4 billion yuan (HK$2.68 billion) early this month.
The plots are about 10 minutes by car from Jinmao Tower, a Pudong landmark.
On top of the acquisition price, surveyors estimated that construction costs for the three developments would total more than 2 billion yuan.
A senior official of the Shanghai exchange said the land purchase was part of the national securities regulator's plan to create a zone to house a cluster of trading houses.
'But the exchange won't be relocated for at least three to five years. [Setting up the zone] is a big plan that will take a long time,' he said.
The official also said the paperwork for the purchase had not been finished yet, but gave no details.
The Shanghai Stock Exchange is on Pudong Road South, a prime location in the heart of the city's financial zone.
Early this month, the Shanghai Municipal Bureau of Land Resources and Housing Management announced that the exchange had won Site 3 of the Zhuyuan Park Commercial District for 1.09 billion yuan.
It said the China Financial Futures Exchange was awarded Site 1 for 880 million yuan and the China Securities Depository and Clearing Corp got Site 2 for 441 million yuan.
Of the three sites, the stock exchange got the largest with a total gross floor area of 100,800 square metres. The plot held by the futures exchange will have a total gross floor area of 81,400 square metres, and that of the securities clearing house will provide 40,100 square metres.
Knight Frank director and research head Xavier Wong said clustering financial trading houses in one area would attract more multinational companies to the core business district.
'[In] cosmopolitan cities like London and New York, their core business districts are made up of a cluster of investment banks, law, accounting and insurance firms,' he said. '[Clustering] will also help increase the commercial value of the district. That is why office rents in Shanghai are the most expensive on the mainland.'
Prevailing rents in major office buildings in Pudong range from US$1.50 to US$2 a square metre a day, the highest on the mainland.