A trio of state-owned developers has agreed to pay RMB 4.6 billion ($650 million) for a land parcel in Shanghai’s Yangpu district that is earmarked for up to 147,000 square metres of office and research and development space.
The 36,800 square metre site, Yangpu District Pingliang Community C090102 Unit 0218-01, was acquired by a consortium of China Energy Conservation and Environmental Protection Group (CECEP), Shanghai Huayi Group and Shanghai Yangshupu Real Estate Co, according to an announcement by the Shanghai Land Exchange.
The consortium, which was the sole bidder in the public tender process, won the site for the equivalent of RMB 30,867 per square metre of buildable gross floor area. Located within Shanghai’s inner ring road on Yangshupu Road in the East Bund area, the site is designated for corporate headquarters use with a focus on emerging industries such as energy conservation, clean energy and green building design.
With the government aiming to achieve grade A commercial standards, developments in the project are required to have floor plates of at least 1,000 square metres in order to appeal to medium- and large-sized enterprises. The tender also was designed to facilitate the creation of a new industrial hub that will enhance the Yangpu riverfront, a swath of northeastern Shanghai lined with ageing shipyards, chemical and textile plants and light industrial facilities.
The site is bounded by Yangshupu Road in the north and by the planned Weinan South Road, Kuandian Road, and Anpu Road in the east, west and south, respectively. Yangpu Bridge, which spans the Huangpu River, neighbours the project.
Sustainable Development on the Riverfront
“The river frontage within Yangpu District, at 15.5 kilometres in length, is one of the largest stretches of urban riverside in the world currently undergoing urban regeneration,” noted Shaun Brodie, head of Occupier Research for Greater China at Cushman & Wakefield. “In the future, around 12 square kilometres, adjacent to the riverside, will be developed into a new ‘Riverside Business District’.”
Brodie pointed out that Yangpu, with its universities and graduate talent pool, is being positioned as an important locus for science, technology and entrepreneurship in Shanghai. The city’s 13th Five-Year Plan has also designated the East Bund area as a key target for development.
Given the commercial positioning and tender requirements of the project, Brodie added, “some developers may well have withdrawn, leaving only the single bidder with both the know-how and drive to deliver on the required finished real estate product.”
The overall project’s emphasis on green building design aligns with the central government’s increasing focus on sustainability over the last few years, according to James Macdonald, head of Savills Research China. “While not particularly centrally located, the prominent waterfront location and corporate headquarter positioning and the background of the developers will mean that build quality and green credentials will be important,” he commented.
The address in Yangpu “is still an emerging location and will take time to mature,” Macdonald added. “That said, infrastructure linkages such as river crossing tunnels and metro lines are increasing accessibility.”
Yangpu Notches Another Site Sale
Yangpu has seen a steady flow of one to four commercial land sales per year since 2010, according to data from Cushman & Wakefield. The district was also home to a number of residential land transactions this year. Guangzhou-based Poly Developments and Holdings won a residential site around five kilometres north of the historic Bund for RMB 4.179 billion ($621 million) at a government auction in May.
In September, state-backed China Enterprise triumphed over a pair of competing bids from China Vanke and China Resources Land to snap up a residential site in Jiangwan New Town for just over RMB 3.81 billion ($540 million).
CECEP, part of the consortium behind the most recent deal, is an investment holding company that operates in the fields of clean energy and technology, environmental protection and treatment, and energy-efficient construction.
Shanghai Huayi Group, parent company of Shanghai Huayi Real Estate, is involved in real estate investment and development, among other activities. Rounding out the winning trio, Shanghai Yangshupu Real Estate is a wholly-owned subsidiary of Shanghai Yangpu Riverside Investment & Development Ltd, with businesses that include property development, construction, brokerage and management.