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Despite the fast changing Shanghai skyline, it might be what's going on below which will shape the city's future. While last month we assessed the potential impact and value of specific office renovation, this month takes a look at the rise of the alternative office. As Shanghai's economy broadens towards the service industry, so too do demands for different types of office. The impressive high rise developments in Pudong and Puxi, have been a revelation. However, these developments are not proving distinctive or flexible enough for many of the service and creative firms locating in Shanghai.
A New Market is born
Much has been said about the development of Shanghai's warehouses and old factories for office space. But in reality, examples of this remain limited and isolated. Mainly due to a lack of landlord co-ordination and development input. There is a hint that this situation is now changing. Two developments in particular demonstrate a new, wider approach to the issues of creating an alternative working environment. Here, landlords have taken responsibility for the public spaces and basic infrastructure, opening the market to a wider number of potential tenants, who are no longer obliged to shoulder heavy renovation costs. Replacing funky offices in rundown complexes, with striking complexes hosting funky offices.
It's a lifestyle choice
Two examples of landlords co-ordinating an entire project, to combine ready to use work spaces with an overall site project plan are at Jianguo Rd and Shaoxing Rd. At Jianguo Rd. Lifestyle Consulting (Shanghai) Ltd. Have produced an impressive re-development of some 12,000sqm of old warehouse space "The Bridge 8" now acts as a platform for international and Chinese creative consulting and professional firms, by integrating offices, showrooms and brand promotion activities. Rents of around US$0.66/m²/day reflect an absence of similar space in the market. However, unit handover includes ready to use infrastructure such as wiring and plumbing outlets (tenants install their own air conditioning and WCs). Making it affordable for a range of smaller tenants to occupy the premises without having to over invest in renovation.
Nearby on Shaoxing Rd. Gilbert Yang, general manager of Adbay, has been responsible for a similar development. In co-operation with the local government, he has overseen the re-creation of an old factory into an office hub, dedicated to the advertising industry. Mr. Yang states "Adbay's mission is to serve as a centre for the Chinese advertising industryˇwe want to create a hub for the industry to work, meet and undertake research. In addition, the centre also provides training facilities and regular workshops". These units starting at just US$0.4/m²/day include central air conditioning and ready installed WCs.
One of the key features of both developments, is creating a ready to use environment, where public spaces, hand over condition and tenant mix, attract a much wider variety of both small and large tenants.
Future efficiency
For a city seeking to place itself at the forefront of Asia and the world, matching the diversity of working environments provided by market leaders such as New York and London, may require a more varied approach to that of the high rise office. Shanghai's development community should take note.
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