The simpletons of the media speak of property bubble busted Shanghai, and not for a moment figure that the true bubble is still in our future, generating much more gold buying moolah - investing in gold and investing in China and perhaps India is the same trade:
china.scmp.com
<<Saturday, February 11, 2006
Bund to happen
MARK O'NEILL
When well-heeled visitors arrive in Shanghai in 2009 and want to stay in a period hotel on the Bund, they will be able to choose between two properties of the Kadoorie family. One will be the new Peninsula Hotel due for completion that year and the other the Pujiang, now state-owned but which belonged to the Kadoories before 1949 and is being refurbished in the style of the early 1900s.
The properties are part of an ambitious multibillion-dollar project to turn the Bund from a street of rundown commercial buildings into a Chinese Ginza or Fifth Avenue, with upmarket hotels, restaurants, brand-name stores and expensive apartments.
The city government wants to complete the transformation ahead of the World Expo in 2010, when it will show to the world what it has achieved in the 20 years since its resurrection began in 1990, after the decay and neglect during the first four decades of communist rule.
For the outside world, the Bund is a symbol of Shanghai - the bank of imposing stone buildings overlooking the Huangpu River that was its commercial centre in the pre-war era.
In the 1990s, the city wanted the foreign banks that used to own the buildings to lease them back, but the plan failed and the banks established their new headquarters on the opposite side of the river, in Pudong.
Now the Bund is an amalgam - luxury stores such as Giorgio Armani and Cartier, expensive restaurants and health clubs, the national foreign exchange trading centre and big state companies and banks.
On the riverside walkway, rich foreigners mix with red-faced farmers from the interior who marvel at the gleaming skyscrapers and giant electronic billboards.
According to the Chinese press, Saks Fifth Avenue and Harrods are considering opening stores on the Bund. But people in the property business rule this out as long as a busy eight-lane highway runs between the buildings and the walkway. Only if the traffic were diverted and the road became a pedestrian space would the big names consider opening there, they said.
The city's vision for the Bund represents an official acceptance of its semi-colonial past and a realisation of its enormous commercial value, and that this legacy sets Shanghai apart from all other cities in China.
The most important step to realise the vision came on November 30 last year, when Rockefeller Group International (RGI), a US real estate company owned by Mitsubishi Estate, announced that it had received the necessary approval to renovate 14 banks and commercial buildings from the 1920s and 30s into an upmarket residential and retail area.
Originally called Waitanyuan, after the Chinese name for the Bund, the project has been re-named Shanghai Bund de Rockefeller. RGI chief executive Jonathan Green said he hoped it would have the same feel as St James in London, an area of upmarket hotels, offices, shops and apartments that is home to the Ritz Hotel and many of the rich and famous.
RGI is working with a Hong Kong company and state-owned New Huangpu Group, which said that about 80 per cent of the residents of the site, including almost all the businesses, had been relocated.
"For the old people who have lived here more than 40 years, it is a bitter decision," said Liu Qing, who works in an antique shop that is one of few left open in the area. "They do not want to move after living here for so long. But the land is too valuable."
The shops in the street are boarded up and covered with posters proclaiming "Welcome World Expo, build Waitanyuan" and "Improve the Environment, Move to New Homes". Since 1990, the city has demolished more than 42.5 million square metres of housing and relocated more than 1.25 million people.
The project involves an area of 17 hectares and includes the former British consulate and its large garden.
The consulate, a two-storey masonry building with timber-hip roof, was completed in 1872. After 1949, government departments, including the family planning bureau, moved in and put up low-rise buildings in the surrounding area. These have been demolished and the government offices have moved out, leaving the building empty while the city decides what to do with it. Proposals include a museum, a private club or retail space.
Next door is the site for the new Peninsula, cleared by the demolition of a multi-storey Friendship store built in the 1950s.
Its owner, Hong Kong & Shanghai Hotels (HKSH), said construction would begin this year after obtaining all the necessary government approvals, with completion due by 2009. "The hotel's quality will be in line with that of other Peninsulas, with rates at the top end of the market and a clientele a mix of international and domestic, business and leisure," said Kate Kelly, its manager for corporate affairs in Hong Kong. She said that the height, number of storeys and exterior and interior styles were under development.
Its main competitor will be the Pujiang, or the Astor House Hotel as it was before 1949. The Kadoorie family acquired the property in 1917, making it the flagship for the HKSH, founded in 1923.
When it opened in 1846, it was the first western-style hotel in China. It was rebuilt in its current neo-classic Baroque style in 1907 and advertised as the Waldorf-Astoria of Asia. In its lobby hang photographs of famous guests, such as Albert Einstein, Charlie Chaplin, Bertrand Russell and Ulysses Grant - although historians suspect some of them stayed elsewhere in the city.
The hotel introduced Shanghai's first electric lights, telephones, talking films and balls, ending a restriction on women attending social events.
The state company that owns it now has spent millions restoring it to the style it was in the early 1900s, with the next item the Peacock Hall, "the most famous ballroom in the Far East in the 19th century".
"The orders from the city government are to restore it to a five-star standard," said Peter Hibbard, author of the Odyssey Guide to Shanghai and The Bund-Shanghai: China faces west which is due out this year.
"The Bund needs more life in the evenings," he said. "Two more boutique hotels may be built in the area."
Sam Crispin, head of Crispin Property Consultants, said that the Rockefeller project, which involved retaining many of the buildings' interiors as well as the exteriors, was complicated but had been done before.
"The Bund tenants are all being relocated," he said. "The banks are resisting but will go eventually. The success of the project depends on the infrastructure, especially moving the traffic along the Bund underground. This is a major undertaking but is the key to the project. It would be wonderful to open up the space, without cars, for cultural activities. That is the vision of the city and the Rockefeller company."
Currently, a busy eight-lane road divides the Bund from the trees and raised walkway along the river. As long as this volume of traffic continues, the Bund cannot become a shopping and leisure centre such as another Xin Tian Di in Shanghai or Hong Kong's Lan Kwai Fong.
The city government is considering plans for a tunnel to move the cars below ground and a widening of the three nearby north-south roads, which would allow the Bund to become a pedestrian area.
This transformation might entice high-end department stores to open on the street but it is a major engineering and financial challenge.
If they do it, then in 2009 Mr and Mrs Visitor will be able to enjoy breakfast at the Peninsula and play frisbee next to the Huangpu River.
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