North Bund Table of Contents 04-05

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North Bund Table of Contents 04-05 RESEARCH NEXT2017 Office Market STOP: Report North Bund Table of Contents 04-05 Introduction 06 Location and Transportation 07-11 Supply 12-14 Demand 15-16 Rents 17 Sales 18-19 Opportunities and Risks Connecting People & Property, Perfectly. 2017 Office Market Report NEXT STOP: North Bund Wenshui Road Introduction In recent years, a number of Inner Ring Road emerging business districts North with development potential have Bund been identified by the Shanghai Middle Ring Road Government. Of these, the North Bund Area, which is located in the southern part of Hongkou District, is one of the most representative. After a dozen Road Ring Middle years of development, the area Shanghai has been developed into a cluster Railway of shipping and financial services Station businesses from originally just a Lujiazui shipping centre. A 2 Nanjing 0 West As Sinar Mas Centre, The Star Road Harbour and other landmark People’s projects entered the market, there Changfeng Square is an increasing demand for office Zhongshan buildings in the North Bund. Park Huaihai Middle Inner Ring Road New Road In this report, we address the Hongqiao progress, functions and office planning issues in the North Bund Hongqiao Xujiahui Post Area. We explore future development CBD -Expo opportunities and prospects by Inner Ring Road analysing the existing and future Yan’an West Road tenant profiles, office rents and prices, and competitive advantages and strategic positioning of the area over other emerging business districts. Xuhui Binjiang Figure 1 Middle Ring Road Map of Shanghai’s Major Qiantan Office Markets Core CBDs A 20 CBDs Secondary Business Districts Emerging Business Districts Source: Knight Frank Research 04 05 2017 Office Market Report NEXT STOP: North Bund Location and Transportation Supply Covering a total area of 64,088 sqm, the North Bund Area is located at the riverside in the The North Bund Area is one of the most important emerging business south Hongkou District, with the Bund to the west and Lujiazui to the south across the river. districts in the Shanghai office market with two construction booms. Background and Current Status Both the Dalian Road tunnel and the Cruise Terminal, Tilanqiao and Dalian Xinjian Road tunnel, which connect Road. The planned Line 19 will also The North Bund office market's of a number of Grade B office 2008, up 50% from that in 2005. From Puxi and Pudong, run through the run through the area from north to earliest development dates back buildings. The years 2006-2008 saw 2010 to 2012, with the establishment of North Bund Area. Subway lines 4, south. to 1997, when the Shanghai Bund the completion of several high quality the North Bund Shipping and Financial 10 and 12 all lead to the area. Line LINE International Tower was completed. Grade A office buildings, including Services Cluster, the North Bund office 12 runs through the area with stops After it was designated for shipping BM Tower and Ruifeng International market saw a construction boom, with at Tiantong Road, the International 12 in 2002, there was an inflow of a large Building. Subsequently, office stock a total of 530,000 sqm of office space number of cargo service firms. This increased by approximately 70,000 completed within two years, up 150% runs through the area with stops at Tiantong Road, the International Cruise Terminal, consequently led to the development sqm per year, reaching 630,000 sqm in from the period 2006-2008. Tilanqiao and Dalian Road. Figure 3 Figure 2 Historical Stock and Future Supply of Office Buildings in the North Bund Area (2005-2020E) Boundaries and Transportation in the North Bund Area 2,500 '000 sqm The 1st The 2nd Construction Boom Construction Boom North Bund Area Line 4 Line 10 Line 12 Line 19 (proposed) 2,000 Zhoujiazui Road The Establishment of LINE Linping Road Station 1,500 Shipping and Financial Hailun Road Station 12 Services Cluster Dalian Road Station Sichuan North Road Hailun Road Dalian Road B Zhoujiazui Road a o 1,000 s h a n Siping Road R Changyang Road o a Tilanqiao Station d Wusong Road LINE Xizang North Road Sichuan North International Cruise 4 Road Station Terminal Station East Changzhi Road 500 Dalian Road Tunnel LINE Xinjian Road Tunnel LINE Haining Road 10 1912 0 Tiantong Road Station 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018E 2019E 2020E $ Source: Knight Frank Research Shipping Services Cluster Shipping and Financial+ Services Cluster Source: Knight Frank Research 06 07 2017 Office Market Report NEXT STOP: North Bund Figure 4 Distribution Map of Existing and Planned Office Developments After nearly 20 years of development, an office cluster was formed in Sichuan Road, Wusong Road and the riverside Baoshan Road Baoshan area. After being positioned as a shipping and finance service cluster in 2011, the existing office buildings were Zhoujiazui Road not able to meet demand for high quality office buildings, so a number of high quality office buildings, including Sinar Mas Centre and Landmark Centre, were constructed. By Q1 2017, total office stock in the North Bund Area reached 1.51 million sqm, with Grade-A office space amounting to 67% of the total. Dalian Road Hailun Road Haitai International The Star Bund Centre 1 1 Zhoujiazui Road Building Shanghai International Citic Plaza 2 Shipping Service Centre 2 Changyang Road Middle Zone Sichuan North Road Landmark Centre 3 Shanghai Yifang Building 3 Wusong Road 6 1 SMI Holding Building Sino-American T.&F. 5 4 4 Tower East Changzhi Road 2 12 14 BM Tower SIIC Project 13 16 5 5 Shanghai Bund Haining 1Road 3 15 Plot HK322-01 6 International Tower 6 2 10 11 D a l i a n SIPG Tower Xinjian Road Tunnel R 7 o 5 a d 8 T Yuanyang Building 9 u 8 4 7 n n e 3 l Shanghai International 9 Cruise Terminal Port 4 Authority Building 6 Sinar Mas Centre 10 SCG Building 11 Eastern Harbour 12 International Building Jiayu Building 13 Existing Supply Shanghai Point 14 Future Supply Gang Yun Buiding 15 Ruifeng International Building 16 Source: Knight Frank Research 08 09 2017 Office Market Report NEXT STOP: North Bund Landmark Developments Star Harbour Co-developed by SIPG (Shanghai International Shipping Service Centre which will be landmark buildings in The office market in the area will reach another construction peak in the coming four years. In 2017-2020, new office supply will reach an average of International Port Group) and has 19 buildings (all to be completed the North Bund Area. The Shanghai Franshion Properties, Star Harbour in 2017). Both projects are for sale; Port International Cruise Terminal consists of the Shanghai Port their target buyers include central and Shanghai International Shipping 257,000sqm per year. International Cruise Terminal, government-owned and large state- Service Centre comprise one of Shanghai International Shipping owned enterprises. Most buyers the major development projects Service Centre, Star Bund Centre, hold these office spaces for self- in the area, with total office space and three million sqm of Grade-A occupation, and rest will be leased amounting to 34% of total office It is estimated that there will be 1,030,000 sqm of new office space completed in 2017-2020, while office stock will increase to office buildings. The Shanghai Port out. The Star Bund Centre, which is stock. Furthermore, a 130,000-sqm International Cruise Terminal boasts located on Haimen Road, plans to shopping centre in Star Bund Centre 13 buildings, while the Shanghai develop two 263-metre-skyscrapers, is scheduled for completion in 2019. 2,350,000sqm by 2020. Sinar Mas Centre The SIIC Project, Star Bund Centre Phase II of Star Harbour, and Sino-American T.&F. Tower Another important commercial area sqm, of which office space accounting boutique hotel brand W Hotel and will be launched by 2020. in North Bund is Sinar Mas Centre for 130,000 sqm. The office tower will open a retail mall of 70,900-sqm area. As a landmark building in North phase one in Sinar Mas Centre was in future. At that time, the ancillary Bund, Sinar Mas Centre is comprised completed in Q1 2017, adding a total facilities in Sinar Mas Centre Area office buildings, shopping centre and of 65,000-sqm office space to the and Star Harbour Area can meet a luxury hotel. Sinar Mas Centre has market. In addition, Sinar Mas Centre the requirements of the office and a total GFA of approximately 420,000 has introduced Starwood's luxury residential population in the area. Sinar Mas Centre The Star Bund Centre (under construction) Shanghai International Shipping Service Centre Area Sino-American Shanghai International T.&F. Tower Cruise Terminal Area under constuction ( ) SIIC Project Yifang Building proposed ( ) 10 11 2017 Office Market Report NEXT STOP: North Bund Demand In the decade from 2006-2016 office demand continued to drive down vacancy in the North Bund Area. Background and Current Status In Q1 2017, two office buildings, the office vacancy rate in the area will rise The major tenants in the North Bund the area. As of Q1 2017, up to 4,500 Bank of China), NCI (New China Life Sinar Mas Centre and Landmark slightly because of upcoming projects, Area are shipping companies and shipping companies were operating in Insurance) and JIC (Jianyin Investment In Q1 2017, the overall vacancy rate in the North large and mid-sized domestic financial the area, for a compound annual rate of China Group). The number of Centre, were completed, adding such as the Star Bund Centre, Bund Area stood at approximately 180,000 sqm of new office space.
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