Mori Building Co, Japan's biggest private developer, signed its first tenants for China's tallest skyscraper and is asking rents 40 percent higher than Shanghai's priciest, underlining demand for offices in the nation's financial center.
Subsidiaries of Mizuho Financial Group Inc and Sumitomo Mitsui Financial Group Inc will lease space at the 492m Shanghai World Financial Center, Tokyo-based Mori said today in a statement. The building will be the world's second-tallest office block when Mori completes the tower next year, after Taipei 101 in Taiwan.
"This is a huge building," said Remy Chan (陳立民), regional director of Asia Pacific at Jones Lang LaSalle Inc, the world's second-largest commercial real estate broker. "It will be a market maker. Their rental policy will impact the market."
Financial companies are expanding in Shanghai after stocks tripled this year and the government relaxed rules on foreign banks, driving down the city's office vacancy rate. Mori started marketing the building before an estimated 3 million square meters of space comes on to the market by the end of 2010, doubling Shanghai's office supply.
Mori's skyscraper will add 226,900m2, about half as much new space as Shanghai usually needs in an entire year, Chan said.
The new center will push the vacancy rate up to 5 percent for the city's Pudong region at the end of next year from 1.9 percent in June, and may stall rent increases in the area, he said.
Mori is asking as much as 640 yuan per square meter per month on a net area basis for the building, equivalent to US$1.99 per square meter per day on a gross area basis, Chan said.
The average office vacancy rate in Shanghai fell to 2.6 percent as of June from 4.9 percent in March, according to Jones Lang LaSalle. Rents have gained 14 percent to 8.2 yuan a square meter as of June 30 compared with a year earlier.
Construction of the tower was halted in 1997 because of the Asian financial crisis. In 2005 political tensions over Japan's occupation of China in World War II led to the removal of a circular hole from designs of the building's apex on concern it resembled the Japanese flag.
The glass and reinforced concrete skyscraper, which includes a shopping mall and a 180-room Park Hyatt hotel, will overshadow the 88-story Jin Mao Tower that stands on an adjoining plot. Its observatory will be the world's highest at 472m, Mori said.
The building has 91 elevators and Mori used 2,271 pilings in the foundation, which would stretch 88km if laid end to end.
HSBC Tower, Citigroup Tower and Azia Center now ask Shanghai's highest rents, said Kenny Ho (何恩凱), the head of research for Shanghai at Jones Lang LaSalle.
"The market is very, very tight," Ho said.
Mori is targeting international financial companies as tenants for the building in a city with China's highest foreign direct investment -- US$7.11 billion last year. Shanghai's office supply is expected to double by 2011 to 6.1 million square meters, according to a report by Jones Lang LaSalle.
"For Mori to come out as one of the first, there is definitely an advantage in terms of rent negotiations," Ho said. "Companies looking for a space immediately will have to talk to Mori."
Mori expects a 40 percent occupancy rate when the building is completed, 10 percentage points more than initially anticipated.
"A 40 percent occupancy rate for that building means there is still some 120,000m2 to be filled, the size of two other regular office buildings," Ho said. "So there is still a lot of space to be taken up."
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day