Hong Kong's largest developers are expanding their grade-A office portfolios in the city to tap its booming financial business Shanghai's commercial property league table will see a major reshuffle by 2010 as major players from Hong Kong boost their presence in the city's grade-A office sector. Sun Hung Kai Properties (SHKP), which has expanded aggressively in the mainland in recent years, plans to boost its office portfolio to 280,000 square metres in 2010 from 46,000 square metres at present, according to Jones Lang LaSalle research data. This will take the developer to third place from its current 10th position. SHKP is building a large commercial complex on a prime Pudong site of 690,000 sqft opposite the television tower in Lujiazui, which will incorporate top-grade offices, retail and hotel space, and is due for completion from 2008. Conglomerate Citic Pacific will rise to second place with 400,000 square metres of office space in developments that include an office-hotel-residential-serviced apartment project on a 251,380 square metre site, formerly run as a shipyard near the Huangpu River, also in Lujiazui. The US$2.71 billion project will be built in three phases over the next five to seven years. Nonetheless, Shui On Group, an early mover in Shanghai with 190,000 square metres in office developments at present, will continue to lead the table as its portfolio expands to 1.29 million square metres in 2010. Its flagship project, Corporate Avenue, is a 560,000 square metre development featuring grade-A office towers and other facilities in the downtown Luwan business district. Remy Chan Lap-man, Jones Lang LaSalle national director of China, said Hong Kong developers were eager to speed up their commercial developments to tap into the booming business in the financial hub. 'The outlook for Shanghai's grade-A office space will remain positive in the next few years, despite more and more new office buildings coming on stream,' said Mr Chan, who is based in Shanghai. 'The fact that multinationals are rushing into China is going to drive demand for Shanghai's office market in years to come, particularly in the banking and financial industries.' Jones Lang LaSalle expected grade-A office rents to record another year of double-digit growth this year, following a 25 per cent increase last year, Mr Chan said. But he expected rents to stabilise after 2008. Average take-up for office space in the city stands at about 400,000 square metres annually, while supply of grade-A office space will increase significantly to 4.1 million square metres by 2010, up from 2.6 million square metres at present, according to Jones Lang LaSalle's research. About 43 per cent of the office supply will come from Pudong, up from 34 per cent now, as fewer plots are left in the city centre. Lujiazui, which now houses about 300 financial institutions and more than 50 multinationals' regional headquarters, has become China's Wall Street with growing numbers of financial institutions moving into the district, according to Mr Chan. International banks have been snapping up office buildings in Shanghai as their mainland development base. In the latest deal, Standard Chartered paid 320 million yuan for a 6,000 square metre building close to the Shanghai Stock Exchange Building in Lujiazui to function as its China headquarters, which will be completed in 2008. Standard Chartered's acquisition comes after Citigroup bought Citigroup Tower near the Huangpu river for an undisclosed amount last summer. In late 1999, HSBC bought the Shanghai Senmao International Building in the district for more than US$33 million. 'This trend will continue as China further opens up its financial market for foreign banks by the end of this year,' said Mr Chan. 'In fact, office developments in Lujiazui are forming a central business district for financial institutions in the same way Hong Kong's Central has been developed.'