It is almost impossible to open your eyes in Shanghai these days without seeing someone building something. Office towers and apartment high rises spring up left and right like bamboo stalks in spring rain, gaining a floor each time you turn around. Metro stations seem to appear out of nowhere, and transportation links stretch farther and farther into the more remote areas of the city.
The financial capital's ongoing construction boom represents a big part of its push to become Asia's top business city. As Shanghai grows, it is becoming more and more multipolar; as property development disperses and the subways and highways increase in number, the choices for both office and residential use are expanding in tandem. It is, in short, becoming more like Tokyo than Hong Kong.
While a quick glance at Hong Kong's skyline makes it obvious to a first-time visitor that business is concentrated in the Central district on Hong Kong Island, the whereabouts of Shanghai's central business district (CBD) is not a dead giveaway. Instead, Shanghai has developed a number of discrete - and successful - business nodes that spread grade A and B office space from the lower-cost Xuhui district in the west to imposing Lujiazui in Pudong, opposite the historic Bund on the Huangpu River.
The emergence of Shanghai's major CBDs - there are about six in all - has not been a centrally planned phenomenon. On the contrary, it is the result of self-interested competition over the last 15 years by district governments to attract large multinational tenants, which for the districts mean large tax revenues. "It was kind of a crapshoot at first," says Michael Hart, head of research for Shanghai at real estate firm Jones Lang LaSalle. "Developers made a bet on two or three areas - some of them were successful, and some of them weren't."
Linking success
Today, Shanghai's CBDs are becoming increasingly cramped and costly. Multinationals continue to arrive in town to establish a presence on the mainland, and people stream in from far and wide, driving up rents and sending old tenants out in search of cheaper places to set up shop. On the other side of the equation, major government projects are attracting development and investment in new, less central areas.
There is a push and a pull side of things," says Hart. "Because rents have increased so much, companies have been pushed out to the suburbs, to business parks." Places like Shanghai Business Park (SBP) in Minhang, where Philips is building a 60,000-square meter campus, are developing as an alternative to the CBDs. "There's also the pull factor, where the Shanghai government has these large-scale programs [that attract companies]," Hart adds. Projects like the Master's Cup tennis stadium, the Shanghai Formula One racetrack and the newly opened Yangshan deepwater container port - all of them infrastructure-rich areas.
And Shanghai is getting serious about infrastructure. The city is building nine new subway and light rail lines over the course of just seven years - the first new Metro line, number four, opened in early January - all together totaling 389 kilometers of track. Hart says the access pro-vided by the trains, as well as new roads, will be crucial for vibrant new clusters in the suburbs - not CBDs - to develop and flourish.
The district governments of places where the new lines are being opened will want to use the high-traffic stations to create their own community commercial centers, Hart says. These would in turn make the district more attractive to white-collar workers looking for bigger, cheaper housing than in the city, but still demanding convenience.
In the cases of Minhang, to the southwest of downtown Shanghai, and Yangpu in Pudong, infrastructure will be the deciding factor in the success of two suburban districts that have tradi-tionally been based on agriculture and manufac-turing. When completed later this year, the num-ber five Metro line will connect Minhang's SBP - and its parent, Caohejing Business Park - with the rest of Shanghai, and practically ensure its success. In Yangpu, Shui On Land and Oracle's recently announced Knowledge and Innovation Community (KIC) will likewise depend on the completion of its rail link.
On deadline
Although the last of the new rail lines is scheduled to be finished in 2012, the year everyone is waiting for is 2010, when Shanghai is set to host the World Expo on the banks of the Huangpu. Like Beijing's Olympic clock (and the Hong Kong handover clock before it), a large digital sign on the Bund counts down the seconds like a deadline for the city's ma-jor projects. The subway line connecting the expo site to town is scheduled to be up and running by 2009, the 101-storey World Financial Center in Lujiazui should be completed, and Shanghai will be ready to stand tall before the world.
But what will become of the expo site after-wards? "I think it has great potential to become the next big CBD," Hart says. "I believe the expo site will provide a key opportunity that will at that point have mass transport access, a beauti-ful location - if the riverside regeneration work is successful - in the center of Shanghai." Which, naturally, will mean more construction.
