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."
ENERGY ISSUES: The TSIA urged the government to increase natural gas and helium reserves to reduce the impact of the Middle East war on semiconductor supply stability Chip testing and packaging service provider ASE Technology Holding Co (日月光投控) yesterday said it planned to invest more than NT$100 billion (US$3.15 billion) in building a new advanced chip testing facility in Kaohsiung to keep up with customer demand driven by the artificial intelligence (AI) boom. That would be included in the company’s capital expenditure budget next year, ASE said. There is also room to raise this year’s capital spending budget from a record-high US$7 billion estimated three months ago, it added. ASE would have six factories under construction this year, another record-breaking number, ASE chief operating officer Tien Wu
The EU and US are nearing an agreement to coordinate on producing and securing critical minerals, part of a push to break reliance on Chinese supplies. The potential deal would create incentives, such as minimum prices, that could advantage non-Chinese suppliers, according to a draft of an “action plan” seen by Bloomberg. The EU and US would also cooperate on standards, investments and joint projects, as well as coordinate on any supply disruptions by countries like China. The two sides are additionally seeking other “like-minded partners” to join a multicountry accord to help create these new critical mineral supply chains, which feed into
For weeks now, the global tech industry has been waiting for a major artificial intelligence (AI) launch from DeepSeek (深度求索), seen as a benchmark for China’s progress in the fast-moving field. More than a year has passed since the start-up put Chinese AI on the map in early last year with a low-cost chatbot that performed at a similar level to US rivals. However, despite reports and rumors about its imminent release, DeepSeek’s next-generation “V4” model is nowhere in sight. Speculation is also swirling over the geopolitical implications of which computer chips were chosen to train and power the new
TECH WINNERS: Taiwan and South Korea reported robust trade, which suggests that they have critical advantages in the rapidly expanding AI supply chain, an official said Exports last month surged to a new high, as booming demand tied to artificial intelligence (AI) infrastructure fueled shipments of advanced technology components, underscoring the nation’s pivotal role in the global semiconductor supply chain. Outbound shipments climbed to US$80.18 billion, the highest ever for a single month, rising 61.8 percent from a year earlier and marking the 29th consecutive month of growth, the Ministry of Finance said yesterday. “The surge was driven primarily by global investment in AI infrastructure,” Department of Statistics Director-General Beatrice Tsai (蔡美娜) said. The mass production of next-generation AI computing systems has accelerated procurement across the semiconductor supply
RSS