Japanese, US firms in joint effort

JAPANESE property giant Mori Building will jointly invest US$750 million with America's Silverstein Properties to build a 96-storey skyscraper in Pudong's Lujiazui Finance and Trade Zone, it was announced yesterday.

While outlining details of the development project, the chairman of the Lujiazui Development Co, Wang Ande pointed out that there has been an increase in Japanese and American investment in Shanghai.

The 370-metre tall skyscraper, to house offices, shops and car parks, will be built on a site of 30,000 square metres but will have a total construction area of about 270,000 sq metres.

It will be located along Central Avenue.

Mr Wang said designing the skyscraper has commenced and construction work was scheduled to start in 1996.

'It will be completed in the early part of next century,' he said.

It took one year of negotiations before the agreement for the project was reached.

'Shanghai is starting to attract more Japanese investments,' Mr Wang said.

Another project that has been signed on by Mori Building and Silverstein Properties in Pudong is to build the 46-storey Shanghai Mori Building on a 10,432 sq-metre site.

The total construction area is estimated to be 102,600 sq metres.

Located a few blocks off the street from the skyscraper, the building, which will have three basement floors, will house offices, shops and car parks.

The investment for the Shanghai Mori Building is at US$210 million, inclusive of the land price.

Mr Wang said the building would commence construction next year and is due to be ready in 1997.

A land lease of 50 years has been secured for both sites.

Mr Wang said his company did not have a stake in either project and was not aware of the investment arrangements between Mori Building and Silverstein Properties.

But he said both parties would include other Japanese and American investors in building the skyscraper.

When asked about American investments in Shanghai properties, Mr Wang said they were still minimal.

'There is more from Japanese and Hong Kong investors. But in the last two years, there has been increasing American investment in properties,' he said.

'The big Hong Kong investors have good sites, such as in Pudong and Puxi.' Mr Wang noted that increasing Japanese interests in Shanghai properties in the last couple of years has also raised the demand for luxurious residential properties.

Meanwhile, a leading surveyor, CY Leung and Co has maintained that the highest rent for Grade A office space in Shanghai is for the Jingan district.

Assistant general manager of the company's Shanghai office, Solo Cheung said the district had been the most expensive in the last few years and the rate is expected to jump by between 20 and 30 per cent.

Mr Cheung said the rent for office space in Jingan was more than US$3 per sq metre for one day.

'The price will increase continuously,' he said.

Mr Cheung said second on the list with a daily price of US$2.30 per sq metre was for the district of Hongqiao.

He said the price for office space in the Bund ranged between US$2 and $2.30 per sq metre for one day.

Mr Cheung forecasts the demand for Grade A office space to remain stable.