Posted Jan 7, 2014, 11:30 PM
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Join Date: Jul 2001
Location: Borough of Jersey
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http://online.wsj.com/news/articles/...06443445811168
Shanghai Tower Developers Seek Leasing Agent
By Esther Fung
Jan. 7, 2014
Quote:
The state-owned developer of what will be China's tallest building is taking the unusual step of moving to hire a leasing agent, underscoring the challenges of finding tenants as the country's economy cools.
The 2,073-foot Shanghai Tower—which will be the largest skyscraper in the world after the Burj Khalifa in Dubai when it is completed next year—hasn't yet signed any leases for its 220,000 square meters (2.4 million square feet) of office space. The project is coming to market at a time when rental rates are under pressure from slipping demand and a surge of new supply.
To help fill the building, the owners—a group including state-backed entities Shanghai Chengtou Corp., Shanghai Lujiazui Finance & Trade Zone Development Co., and Shanghai Construction Group Co. plan to hire a leasing agent, an unorthodox step in China, particularly for a state-owned developer.
The plan was confirmed in an e-mail to The Wall Street Journal from Grace Zhu, Shanghai Tower's marketing director. She said that the developer has started to interview real estate brokers.
People involved with the project say that bringing in a leasing agent is important because the developer wants to attract major financial institutions and other international tenants, not just state agencies and other domestic businesses. "They don't want this to just be a Chinese building," said Daniel Winey, managing principal of the Asia region for Gensler, the architecture firm that designed the building. "If you want to attract tenants like Goldman Sachs, Morgan Stanley and Credit Suisse, you're going to need an international broker."
...Many brokers predict that demand will eventually catch up with the new space being delivered. They point out that the city's office market, with 10 million square meters of top-quality space, still pales in comparison with financial centers like Manhattan, which has four times that amount.
But given Shanghai Tower's high cost it will likely take longer for the building to make money than typical office projects. Mr. Winey, the Gensler managing principal, said he doubts any private developer would ever attempt such an expensive design.
"I don't think you would attempt anything like this unless you have a 30-year plus investment horizon," he said.
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