Shanghai’s Hongqiao Development
A prototype for the future of business
On the outskirts of Shanghai lies one of China’s latest ambitious projects, the Hongqiao Development. A little over 10 years ago, the area was a quiet suburb of farmland and factories, but now it boasts eight means of transportation, including an airport; a world-class, large-scale convention and expo center; and high-end hotels and office buildings.
The Shanghai Hongqiao Central Business District (CBD) promises to set a global amenities standard for the business traveler of tomorrow and to draw further attention to the people who help the properties run successfully.
Shanghai’s History as China’s Gateway City
Shanghai’s status as an innovation center stems from its history as the country’s main port city. Located in the Yangtze River delta, with a shoreline along the East China Sea, it remains the busiest port in the world. The port’s massive shoreline can simultaneously support as many as three 70,000-ton cruise ships.
As the port grew, Shanghai became the logical spot for the Chinese government to premier new technologies, especially in transportation. Shanghai was the first city in China to have viaducts, tunnels, bridges and a subway system. Today, Shanghai’s metro system alone transports an estimated 9 million passengers a day, an incredible feat considering most of it was built since 2003. More recently, the city has introduced the fastest trains in the world and new-energy buses, which significantly cut greenhouse gas emissions.
A Convention Center to Welcome the World
Now the area is experimenting with world-class real estate development. One of the crown jewels of the Hongqiao CBD is the National Exhibition and Convention Center, a large space co-built by the Ministry of Commerce of China and the Shanghai Municipal Government. The development has totaled approximately 16 billion renminbi ($2 billion) in investment.
The convention center premiered with the highly anticipated China International Import Expo, which took place November 5-10, 2018. This 6-day expo, themed “New Era, Shared Future,” planned to accommodate 200,000 attendees a day and proclaimed the motto “Six days at the Expo equals 365 days of business.”
When asked about his experience handling the crowds at large-scale events in Shanghai, James Liu, CPM, general manager of asset management for Shanghai Pudong Binjiang Development Construction Investment Co., Ltd., notes: “Eight years ago, as the managers of the Shanghai World Expo, we had to manage more than 400,000 visitors per day. On its peak day, the foot traffic was counted as 1,032,700. We survived the challenge, certainly with the assistance from a great amount of volunteers.”
The central feature of the recent China International Import Expo was a tax-free zone trade area, displaying an index comparing a product’s home-country price vs the expo price. The expo introduced over 1000 services and products not previously available in China. According to Jiachuan Li, director at the Shanghai Hongqiao CBD Development Construction Headquarters, the tax-free zone accomplished two of the main goals for the Expo: Increase domestic consumption of foreign goods purchased in China, and give China the opportunity to demonstrate its commitment to an open market. To keep up the momentum from the Expo, an exhibition hall displaying new products for purchase is now open year round.
An Intentionally Designed Transportation Hub and CBD
The National Exhibition and Convention Center has the benefit of a holistic approach to infrastructure that enables massive events to be hosted more easily. A plan developed by the Shanghai Municipal People’s Government dedicates 300,000 square meters (approx. 3,229,173 square feet) each to exhibition space, office buildings, hotels and restaurants, and facilities for foreign consulates.
A transportation hub links the entire CBD. Hongqiao Airport, built in the 1930s, serves as the hub’s center. A new train station is now connected to the airport, with access to the subway, suburban trains and long distance trains. Shanghai’s second maglev, or magnetic train, is also planned for this area, as well as bus and taxi options. “The transportation hub will spur the city’s economic development and promote a change in the typical urban space layout,” adds Shengyu Tao, CPM, of Shanghai Hongqiao CBD Investment Real Estate Co., Ltd.
The development at Hongqiao is the first of its kind to design a transportation hub on this scale. Mr. Li asserts that 50 percent of Chinese investors have already put money towards the project and taken up office space in the planned facilities. “This type of center will become a necessity as globalization increases. We designed this with international business travel in mind. You can fly into Shanghai, go straight to your meeting, stay overnight in a hotel next door and be home the next day, all without leaving our CBD.”
To top it off, all new structures will be required to be green buildings, and the Hongqiao CBD is expected to reach three stars, the highest ranking of the China Green Building Label.
Changing for the Future
Now that the Import Expo has finished its maiden year, it is largely being considered a success. Over 3,600 companies from 172 countries were represented, and Hongqiao’s development was showcased to the world. Hongqiao is one of the first of fourteen economic and technological zones approved by the State Council of Shanghai. Such large-scale development certainly exemplifies the state of the Chinese economy in recent years and the concentration on Shanghai as a city of innovation. Usually growth such as this is welcomed, but the region’s fast-paced expansion has brought challenges as well.
“China’s economy has developed rapidly in the past five years,” says Mr. Liu. “The biggest change is the increase in holding properties. This requires real estate managers to professionally manage these properties longer to preserve value. As the needs of owners in China change, there is an increase in the need for CPM education. This is why the CPM program has been so well received over the last two years and continues to grow,” concludes Mr. Liu.
With so many opportunities for management and invention, the Hongqiao Development proves to not only be an exciting project for the property managers of Shanghai, but an example for the world ￼
Contributing writers: Daniel Morales and Leah Misbin of IREM’s International Department
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