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Kenneth Ko

Shanghai Fortune World Development Co is offering two large commercial sites in Pudong New Area for sale by tender.

  The two lots are part of the second phase of the massive Shanghai Fortune World project in the Lujiazui Finance and Trade Zone.

  Analysts said the two sites could net more than US$70 million.

  One is an 87,490-square-foot site for an office or hotel complex development with a potential floor area of 753,480 sq ft.

   The second is a 99,664 sq ft site for an office and commercial complex development that could provide a gross floor area of 914,940 sq ft.

  Analysts said potential investors in the two sites could be discouraged by the oversupply of space in Pudong, where new buildings have a high vacancy rate.

   A Jones Lang Wootton report said another 35.5 million sq ft of Shanghai office space would be completed by 2000, of which 12.9 million sq ft would be in Lujiazui.

  However, Edward Cheung, director of C Y Leung & Co, which is organising the tender, said the oversupply was temporary and would eventually be filled by mainland and foreign companies.

  The company said 15.5 hectares of land were developed in phase one of the project.

  Mr Cheung said the Chinese Government's policy of promoting investment in Pudong would make the area one of Shanghai's central business districts.

  Eight foreign banks had been given approval to handle yuan transactions on a trial basis in Pudong and their move into the area would attract more companies working in the financial sector, he said.

  He said the sites were likely to stimulate investor interest and that the developments should be completed within 21/2 years.

   The market should comfortably absorb offices in the core area of Lujiazui in the next few years, he said.

  Shanghai Fortune World Development is a joint venture between Shanghai Lujiazui Finance and Trade Zone Development Co and Fortune (Shanghai).

  The company had made a total investment of more than $100 million and developed a project called Fortune Garden on Dongfang Road in Pudong, according to the tender document.

  Mr Cheung said Pudong and Lujiazui's accessibility was improving, and transport links would further improve once an underground railway line was opened by 2000.

   He said Lujiazui could be compared to Tsim Sha Tsui East 10 years ago, adding that infrastructural improvements would give it an entirely new look.

  The tender for the two sites will close on April 18.

   Analysts said average asking prices for quality office properties in Puxi - west of the Huangpu River - were now in the $223 to $316 per sq ft range. Land would be about $46.50 per sq ft, they said.

  Based on that average, the two sites on sale could net more than $70 million, analysts said.

PRIME LOTS Site one: 87,490 sq ft for office or hotel complex Site two: 99,664 sq ft for office or commercial 



Lujiazui project lots could net US$70m despite concerns of oversupply