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Sandy Li

Grade A office space in Puxi, Shanghai,  remains in demand  as a robust mainland economy  fuels more multinational corporations to expand and relocate to premium buildings.

The 50-storey grade A office tower at Park Place, built by the United States-based Shanghai Cross Ocean Investment on Nanjing Road West in Jingan district, is one of the few developments  being offered for pre-leasing.

The US$330 million development also comprises a 34,000 square metre retail complex and a 230-room boutique hotel.

About 40 per cent of the office spaces  had been committed,  said Patrick Chen, a director at Shanghai Cross Ocean Property, a unit of Shanghai Cross Ocean Investment which was formed by a group of overseas Chinese businessmen in the US.

It is the first property development  by Shanghai Cross Ocean Investment

'Half of the area being taken up is from the world's top 500 companies,' Mr Chen  said.

While foreign corporations were growing rapidly in Shanghai, Mr Chen  said he saw a wave of relocation to new grade A office buildings  that provided larger floor plate and modern facilities.

He said talks were being held  with an international company about leasing more than 100,000 square metres for  10 years.

Other potential tenants were now asking for a lease term of five to six years from their previous terms of three years considering rentals would  rise due to limited supply in Puxi for the next two years, he said.

Mr Chen believed office rents at Park Place,  slated for completion next year, would surpass US$2 per square metre per day later in the year, up from the starting rate of US$1.30 per square metre per day.

'The office building should be fully let by the end of the year,' he said.

Mr Chen expected the retail spaces would be released for pre-leasing next month.

Asking rents for the retail spaces have not been finalised but would take into account prevailing rents at Nanjing Road West of US$6 per square metre per day.

Mr Chen expects the office portion would account for 50 per cent of the total rental income in future if the whole development was fully operated. The  remainder would  come from  retail and hotel.

Shanghai Cross Ocean Investment would continue looking for development opportunities in the mainland, he said.

'We will use the Park Place as a model and expand to other cities,' he said.

To mark a new landmark in Shanghai, the firm  will install a world renowned masterpiece, Nobility of Time, by the  surrealist Salvador Dali, in Park Place



Multinationals in Puxi seek grade A office space