Citigroup's property unit has purchased four office blocks in Shanghai's
former low-rent industrial district of Zhabei for about US$65 million, a source
familiar with the deal said Wednesday.
The office blocks, 38,000 square meters in total, are part of the
250,00-square-meter Live Hub commercial complex in the Daning area.
The complex was built by Hong Kong developer Chongbang Group and is near
Yanchang Road Metro Station on Line 1.
Despite a slowdown in the residential sector under the government's austerity
measures, office and retail property in Shanghai have remained active given
steady economic growth.
Shanghai's residential market reported a 27 percent drop in transactions and
a 2.2 percent drop in prices last month from a year ago, continuing a downward
trend that started in June.
However, multinationals continue to expand businesses and retailers are eager
to enter the market - thus the rental market has remained strong.
The Live Hub complex has leased more than 80 percent of its retail space
since completion in the middle of this year. Tenants range from Starbucks to
sportswear giant Nike and middle range fashion brands.
Shanghai Huaxu Investment Co, developer of Plaza 336, a new shopping complex
in People's Square near Raffles Plaza and Shimao Brilliance Plaza, said it has a
long waiting list of would-be tenants even though it will not start operation
until the first quarter of next year.
For existing properties, Shanghai Times Square on Huaihai Road M. has
succeeded in raising retail space rents at least 50 percent this year by
upgrading its mix of tenants amid robust demand from luxury retailers.
After embracing Spanish fashion giant Zara's second store in Shanghai last
month, the shopping center will soon welcome Italian fashion brands MaxMara and
Maxco.
Citigroup also acquired a 75 percent stake in Novel Plaza's prime office
building in People's Square for US$50 million in November.
(For more biz stories, please visit Industry Updates)
