Shanghai’s Free Trade Zone (FTZ) will be open for business soon, and its property market has been generating a buzz. On September 24, the government released four plots of land to generate transfer income according to the National Business Daily.
Before the move, the city had sold a number of plots of land at premium prices and rent prices were rising, the news report stated. When the FTZ opens, the funds in the zone will flow outward to the overseas property market and the city’s commercial district will have to face an emerging rival.
Experts do not expect that the impact will be significant in the early stages. Once the Zone adopts a tax-free shopping policy, it will affect the city’s retail businesses and is likely to drive down Shanghai’s commercial property rental rates.
The tax free shops will focus on international luxury products. Consumers spending money on these goods will help pay for the high rents in Shanghai’s commercial districts.
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