[photopress:shanghai_pudong_lujiazui_square.jpg,full,alignright]A report by Jones Lang LaSalle, a real estate service company which obviously has some bias in its views, suggests that Lujiazui in Pudong, Shanghai, will be the largest business district in Shanghai by 2010.
The grade-A office space in Pudong, which is all located in Lujiazui, amounts to about 1.1 million square meters and currently accounts for 43 percent of all grade-A office space in Shanghai currently. Lujiazui should be home to more than half of the city’s grade-A office space by 2010 with a number of new projects starting up over the next few years.
Anthony Couse, the company’s local managing director, said, ‘The Lujiazui precinct has had a substantial share of the office supply since the mid-1990s, but vacancy has trended downward after spiking just prior to the Asian Financial Crisis in 1997. Tenant demand since then has been driven largely by the financial and banking sector.’ As much as 43 percent of all office space in Pudong has been taken up by banking and financial users since 1993.
The LaSalle forecast puts that the percentage as rising to 50 to 55 percent by 2010.
Last year, the State Council reaffirmed that the 31.78-square-kilometer Lujiazui area, as the only finance and trade zone among the 185 state-level development zones.
Overall, the take-up of grade-A office absorption in Lujiazui has averaged 165,000 square meters over the last 10 years. The report believes that will jump to an of average 277,000 square meters over the next five.
Office rents in Lujiazui bottomed out in 2000 and since then have had an average annual growth rate of 7.7 percent. The report thinks this is likely to grow some 27 percent over the next two years on strong demand.
The report said that tax benefits and incentives offered by Lujiazui have attracted more and more international and large domestic occupiers.
Then comes this, to an outsider, astounding line:
If a multinational company selects Lujiazui for regional headquarters, the company’s employees will receive a tax rebate of 100 percent on personal income tax in the first year of operations.
Source: Shanghai Daily