Tenants want only the best
The growing demand for luxury goods on the mainland has also boosted the demand for top-of-the-line office space in Puxi, Shanghai, as international retailers are aggressively expanding.
Wheelock Square on Nanjing Road West is one of the premium grade-A office buildings that has benefited from this trend, according to Dave Siu, general manager for estates management in Shanghai at Wharf China Estates, a subsidiary of Hong Kong property developer Wharf Holdings. Among the new tenants of the 61-storey office tower are Coach, a luxury fashion accessories producer and retailer; Burberry, an international fashion house; and FANCL makers of skincare products.
'Each of these companies has taken up an entire floor at Wheelock Square, measuring about 2,100 square metres,' Siu says. 'They have more than doubled the size of their old offices. Against a backdrop of robust growth in domestic consumption, these international luxury goods retailers have expanded their operations in Shanghai substantially and strengthened the administration support [by increasing headcount] over the past year.'
Wheelock Square has attracted multinational corporations in professional services, pharmaceuticals and trading companies, Siu adds. 'Office rents of premium grade-A buildings in Shanghai cost about 25 per cent of the rents for super grade-A buildings in Hong Kong's Central district.'
Some of the largest tenants at Wheelock Square include pharmaceutical company Bristol-Myers Squibb, which occupies three floors. The company has moved from the Luwan district and more than doubled its office space. Another major tenant is international architectural consultant AECOM, which has taken up three floors for its regional headquarters.
Wheelock Square started leasing its office space in May last year and the occupancy is close to 70 per cent. 'We expect full occupancy by the end of 2011,' Siu says.