
Lujiazui Financial Holding Plaza occupies one of Pudong’s biggest intersections
As analysts warn of a “lost decade” in Chinese office markets, state-backed Shanghai Lujiazui Development Group Co Ltd, better known as Lujiazui Group, is scrambling to sell about 20 Shanghai office towers estimated to be valued at RMB 30 billion ($4.1 billion) or more.
Market sources confirmed to Mingtiandi that the company controlled by the Pudong district government has asked brokers to help find buyers for buildings in its portfolio of office assets centred in the Lujiazui financial zone and Qiantan International Business Zone on the east side of the Huangpu River, as China’s property crisis undermines the finances of even companies with the firmest government backing.
The portfolio includes Lujiazui Financial Holding Plaza, Lujiazui Fuhui Building, Century Metropolis, Century Financial Plaza, the DBS Bank Tower and the China Diamond Exchange Center, among other properties, with the Shanghai-listed group having served as master developer for both Lujiazui Financial District and Qiantan. Details of the exercise were first reported Tuesday by Bloomberg.
News of the potential fire sale comes after the company warned in its annual report released Monday that Shanghai’s office market faces a “long-term correction”, echoing an Oxford Economics analysis from last week underscoring a supply glut and weak demand in China’s key office markets.
Eyes on Pudong
One local broker described the portfolio as composed mostly of “trophy assets” but indicated that the marketing effort had received immediate response from potential buyers. The Pudong division of SASAC, China’s State-owned Assets Supervision and Administration Commission of the State Council, which is responsible for managing state-owned enterprises, is the majority shareholder in Lujiazui Group.

Lujiazui Group chairman Xu Erjin has a few buildings for you
In Lujiazui, the 2009-vintage DBS Bank Tower provides office space comprising 72,044 square metres (775,475 square feet) of gross floor area. The 19-storey building sits just south of the Huangpu River’s eastern bank, roughly 1 kilometre (0.6 miles) from Lujiazui station of Shanghai’s metro line 2.
Completed in phases in the early 2010s, Lujiazui Century Financial Plaza consists of five office buildings spanning a combined gross floor area of 312,000 square metres of office space. Located at 1788 Century Avenue, the property is close to the Zhuyuan business district and has access to metro lines 4, 6 and 2.
In Qiantan, south of Lujiazui, Lujiazui Group has established three joint venture projects with Swire Properties, with the Hong Kong-based developer last October having confirmed its purchase of 40 percent stakes in a pair of Pudong mixed-use projects from Lujiazui Group as part of a HK$100 billion ($12.8 billion) regional investment plan.
Lujiazui Group’s urge to sell comes as other state-backed mainland developers, including Sino-Ocean Group and China Vanke, have been unloading assets to meet their financial obligations in the face of crumbling demand for both residential and commercial space.
Sino-Ocean said Monday that its largest shareholder, state-owned China Life Insurance, is in discussions to take over its stake in a Beijing mall project for RMB 3.1 billion ($428 million). In its 2023 financial results published Tuesday, the developer said it lost RMB 13.4 billion in 2023, after suffering a RMB 13,8 billion shortfall a year earlier. In May of last year, Sino-Ocean sold a Beijing shopping centre to mainland retailer Easyhome for RMB 348.8 million, before defaulting on offshore bonds later in 2023.
Earlier this month, reports surfaced that China Vanke, which is controlled by state-owned Shenzhen Metro Group, is in talks to sell its 21 percent stake in fund management giant GLP as it struggles to pay down $14 billion in debt.
Oversupply Weighs Heaviest
In a report titled “Chinese Office Markets Look Set for a Lost Decade”, Oxford Economics noted that while demand-side fundamentals have been relatively weak, a key concern is developers continuing to roll new office building in a market facing record vacancy levels.
“Despite the prevailing global headwinds, China’s office markets have been flooded with new supply, evidenced by higher vacancies relative to other global markets,” the analysis said. “All major cities across China currently have vacancy rates above 20 percent, with nearly half of the major cities exceeding 30 percent.”
As a result, China has the highest office vacancy rates of all major markets worldwide, according to Oxford Economics.
The slump comes at a time when urbanisation rates for some of China’s major cities are slowing rapidly, the report said, with many people opting for smaller regional cities or towns. Shanghai saw a net outflow of population in 2023, Oxford Economics said, citing research by MetroDataTech.
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