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Elaine Chan

The emergence of Shanghai's Xuhui district as one of the city's non-central commercial districts has been no easy task and many challenges still lie ahead.

  On the surface, its retail and commercial atmosphere is the envy of other districts, yet Xuhui officials are not satisfied.

  Xujiahui, the district's main retail and commercial area which pulls the crowds and the foreign capital, suffers from traffic chaos and pollution.

  From a total area of 13.4 square kilometres in 1982, Xuhui district has grown to 54.76 sq km and is touted as Shanghai's largest urban district.

  Wang Zhiqiang , assistant magistrate of Xuhui district and director of its construction committee, said the focus was on continuing efforts to develop Xujiahui, which is regarded as Shanghai's 'southwestern door'.

  He said Xujiahui was in the second phase of a three-stage development plan which, when completed in 2000, would see the area's commercial and residential space expand to a total of 21.5 million square feet.

  The second phase development was scheduled for completion next year and would consist of almost 14 million sq ft, he said.

   The amount would be evenly divided among residential, office and retail space.

  'Xujiahui's development mainly makes use of foreign capital,' Mr Wang said, adding that since 1992 a greater amount of land in Xujiahai had been leased to foreign investors than in other areas in the district.

  According to Brooke Hillier Parker Shanghai, the total amount of retail space under construction is 1.8 million sq ft.

  Projects include the Grand Gateway from Hang Lung Group, Henderson China and Hysan Development, along with Ruijin Plaza, Kunyang International Business Centre and the Singaporean-invested Xujiahui Metro Entertainment Centre.

  Zhou Jinkang , assistant general manager of Shanghai Metro Cultural and Entertainment Co, said the Metro project would have 1.2 million sq ft of office and commercial space and would cost US$140 million to build.

  The Grand Gateway is expected to have 3.3 million sq ft of office, residential and retail space, as well as serviced apartments.

  Existing major retail developments in the district are the No 6 Department Store, Oriental Shopping Centre and the Taiwan-backed Pacific Department Store, which together provide 618,930 sq ft of space.

  The retail developments are situated around a circle at the junction of Huashan, Hengshan, Zhaojiabang and Caoxi roads.

  Mr Wang said Shanghai's per capita retail space of 10.8 sq ft was greater than Hong Kong's.

  Competition is tough for retail businesses but we are confident.'   Set to further boost Xujiahui's status is a plan to build the Puxi area's tallest building.

  To be developed by the Korean firm Daewoo Corp, its 80-plus storeys will rise more than 400 metres.

  Brooke Hillier Parker's Shanghai chief representative, Sam Crispin, offered one reason for the non-stop flow of foreign funds into the area.

  'The area offers more stable investment in terms of yield and growing popularity,' he said.

  The central districts in Shanghai were over-built and there was a worry about a certain degree of over-supply of office space.

   New office supply throughout the city has come on stream since late last year, forcing rents to decline.

  But Mr Wang said it was a different story in Xujiahui because quality office space was lacking.

    Apartments there have been adapted for use as offices.

  One example is the Shanghai Industry and Commerce Centre, which consists of a series of residential blocks that cater to foreigners in the city.

  Analysts see Xujiahui developing into a major non-central office area within two years.

  Sale prices and rents in the area are comparatively lower than in Huangpu, Jingan and Hongqiao districts.

  Brooke Hillier Parker said office space was selling at an average of US$204.4 per sq ft against $325.2 per sq ft in Huangpu district, where the Bund is located.

  New office space totalling 2.5 million sq ft is being constructed and will be completed between the second half of this year and 1998.

  Xujiahui also boasts one of the largest underground shopping centres, with three million sq ft completed or under construction.

  Of that, 1.5 million sq ft is for a car park which can accommodate 4,000 cars.

  Ideally, the district government wants the roads to be strictly reserved for cars, with pedestrian traffic directed underground, where links can be made to various department stores.

  The plan may be good, but residents are still not accustomed to crossing roads underground. They compete with cars on the surface. As a result, traffic in Xujiahui is chaotic.

  'It is very messy. Perhaps there should be some overhead bridges,' said the chief executive officer of the Shanghai City Comprehensive Transportation Plan-ning Institute, Gu Xianrong .

  The district has only one overhead bridge.

  Xuhui officials expect pedestrian traffic to increase when the second railway station in the district opens.

  Construction on the station was expected to start soon, Mr Wang said.

  Such a development would bring in more commercial activity, but the traffic chaos has to be sorted out first.

  Despite this, Xuhui district is blessed with relatively strong infrastructure support from the city government.

  Accessibility to the district from other parts of Shanghai was enhanced by the inner ring road and Metro Line One.

  In addition, the district stands to benefit from the city government's plans to expand its rail network to six more lines, three from east to west and another three in the north-south direction.

  Mr Wang said one of the east-west lines would cut across the district.

  Infrastructure investment this year for the district, mainly for Xujiahui, was about 600 million to 700 million yuan (about HK$557 million to HK$650 million).

  Since 1992, a total of 34 land sites have been leased in the district.

 Xuhui wants to sell the rights to 2,000 colonial bungalows, built in the 1920s and 1930s, to investors. The spacious houses cost about US$1 million each, Mr Wang said.



Xuhui blossoms as commercial centre