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Stirrings in Jing¡¯An district show a developing approach to the provision of office & retail accommodation in Shanghai¡¯s city centre.
Two examples this month of alternative office and retail centres provide an insight into local developers starting to grasp a new concept of building type. On Changping Rd. the Jing¡¯An Modern Industry Building, stands as an example of an old factory which has been purchased and redeveloped to provide alternative office accommodation. Meanwhile, slightly to the West, the (oddly named) ¡®Total Rich Fun¡¯ presents a grander scale redevelopment of some inner city factory and commercial space on Xikang Rd.
Following on from the successes in the artists compound on Taikang Rd. and the ¡®Bridge 8¡¯ development on Jianguo Rd. these latest offerings again start with the advantage of the developers being able to control and therefore re-format the entire building and its environs. This approach contrasts with the more piecemeal and therefore ultimately less formalized process which has begun to happen in some of the Suzhou Creek warehouses and a few other downtown industrial spaces.
The Changping Rd. property used to be a factory producing electrical goods such as record players and other audio equipment (some of which is still on display). After being purchased by the Shanghai Jing Gong Hong Lin Investment Development Company Ltd. the building has been transformed into modern office accommodation, including new common areas, lifts, central air conditioning and even a garden terrace on the roof. With the industrial proportions of the rooms ¨C high ceilings, large windows etc, making the space ideal for creative industry companies looking for something different from their offices.
With Changping Rd. renting out quickly, the logic of this approach is pretty clear to see. However, even here there are a number of points which bare consideration. Examples of this include the ¡®over renovation¡¯ of some areas. Essentially over specification of some materials has meant the building has lost some of its industrial edge and feel. While oddly, the use of tinted glass on the southern windows has made these units much less bright than they ought to be. While the developer deserves praise for what they have set out to achieve, such details though small make a big difference to the feel of a property. In this case, the overall atmosphere has, fortunately, not been spoiled. However, more sympathetic renovation could have changed this from a good to an outstanding building. Particularly with very reasonable quoting rents of around RMB2.65/sqm/day.
On a much grander scale is the Shanghai Total Rich Fun development on the intersections of Yuyao Rd. and Xikang Rd. occupying an entire island site. Involving the renovation of former industrial premises, the landlords are aiming to turn this into a centre for the food and beverage industry with some alternative style office and retail spaces. Again industrial proportions, with high ceilings, large windows etc. provide really interesting potential. But until the project is completed (projected opening in December) it is difficult to see what tone the developer will adopt towards renovation and restoration. Given the luxurious nature of the name, there is a concern that once again, the site will be ¡®over renovated¡¯.
Interestingly Total Rich Fun also requires potential clients have rather deeper pockets, with rents for office space starting at about RMB5-6/sqm/day (about double that of the Jing¡¯An Modern Industry Building). Again, until the development is completed it will be difficult to gauge whether this really offers good value or not. However, the rental level compares closely with Bridge 8 who are around the RMB6/sqm/day (though no space is currently available).
The emergence of these types of developments is further evidence of Shanghai beginning to diversify its commercial space. This is to be roundly welcomed. However, there is some way to go before effective and sympathetic restoration and reuse of older assets is successfully achieved. The above examples also show that a wide range of prices currently exist for rather similar accommodation. A sure sign of an under developed market.
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