Major Chinese property developers are turning their attention skyward. In Chengdu, developers have either proposed or started projects for 30 skyscrapers for a brand new financial centre. Each one of the buildings will be at least 60 stories in height.
More than 90 commercial projects are under construction in the city, which was ranked as No. 1 in 2011 for commercial real estate project starts. COFCO Group is building an office-hotel-retail complex called Wanda Plaza in the city. Demand for commercial real estate is huge, and there have been no new shopping Centres opened in the city for a number of years.
Chengdu is a relatively wealthy city, and it is still growing. All its new commercial spaces are expected to be filled relatively quickly. Smaller centers, with a population of about one million people (which is small in China), may end up with too many stores if developers go ahead with plans to open 10 new shopping centers per city.
Some experts are predicting that the enormous growth the city has experienced is a bubble which will burst as early as next year. Local governments have been taking steps to attract developer cities like Chengdu and Erdos, Qingdao, and Dalian by pushing through plans for software developments parks, financial centers, and financial streets for new commercial buildings. More development is considered to be a positive development for the city, since it leads to more employment and higher tax revenues.
Some smaller centers have determined that most of the land available for development will be zoned as commercial. In first-tier cities, almost all land sales are for commercial purposes. The same scenario is being played out in some second-tier cities as well.
The China Commercial Real Estate Association has reported commercial retail floor space in shops, markets, and shopping Centres across the nation increased 26 per cent in 2011 to 56 million square meters. In the same year, commercial investment increased to 730 billion yuan $114.6 billion).
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