Shanghai becomes a spotlight for investors

Shanghai high-level industrial property has been a hot spot for investors, after the enthusiasm of investing A-level office building and first class apartment. According to the data collected by Colliers International, from January to May in Shanghai, the newly developed industrial facilities in the main industrial zones has increased by 360,000sq.m and there will be about 4,000,000sq.m newly developed industrial facilities as Science and Technology Parks and many foreign projects will start in the near future.
An employee in Waigaoqiao said that CBRE has a customer needing 5000 sq.m for warehouse, but there was no more available warehouses; and recently CBRE has another customer who needed 80000sq.m for warehouse, there was still no more space.
According to the investigation conducted by Colliers International, the average vacancy rate in main industrial zones was 3.21%, dropping 0.98% compared to last year. The vacancy rate in Songjiang and Baoshan Industrial Zone was the lowest, 0.61% and 0.63% of each. The analyst of Colliers International indicates that the lack of high-level industrial property is due to the great need for industrial facilities and land of international corporations, while the macro control makes the industrial land less and less.
The great need of land is contradicted to the tightening control of land, which boosts the growing of land price. In May, 2007, the average land price in Shanghai main industrial zones was $112/sq.m, with an increase of 10.43% compared to last year. Till now the land price in Zhangjiang Zone is the highest, $206/sq.m and Waigaoqiao $197/sq.m.
The increase of land price leads to the increase of rental fee of industrial property. In May, 2007, the average rental fee per day is $0.41, with an increase of 5%. From the aspect of commercial property rental, Chuangzhi World still gives the highest rental fee, $0.5/day. And International Garden and Caohejing rank the second, $0.49/day.
Besides the rental fee, in May, 2007, the average price of industrial facilities in main industrial zones has also increased by 2.55%, reaching $453/sq.m and there is still an increasing tendency.
The sustained increase of rental fee drives investors to invest their capital into the developing of industrial property. In the first quarter of 2007, Shanghai Zhangjiang zone, Songjiang science and technology park in Caohejing development zone started their construction. According to data, the total construction area in Zhangjiang science zone is 2982000 sqm and will be completed in five years; Songjiang science and technology park in Caohejing development zone consists of standard workshop area, RD area and modern service area, covering an area of 558000sqm with total construction area of 890000sqm.
Besides, a large number of international corporations has spared no efforts to build their own workshops, logistics center and RD centers. The newly concluded deals include Coca Cola in Zizhuyuan with total area of 123000 sqm, AstraZeneca China Center and Honeywell Group in Zhangjiang High-Tech zone.