The state-owned developer of Shanghai Tower, which is set to become China’s tallest building, has chosen Jones Lang LaSalle (JLL) and CBRE Group to be its joint leasing agents, a move that reflects the current tough conditions in the market, the Wall Street Journal reported.
State-owned developers in the mainland normally don’t hire outside brokerage firms, instead relying on in-house staff to market and lease space. The hiring of JLL and CBRE by the Shanghai Tower’s developer is a sign that the group is facing a challenge to find top-notch global tenants, the paper noted.
The building, which is costing 14.8 billion yuan (US$2.4 billion) including land, has 220,000 square meters of office space. So far no major leasing deals have been announced. The 632-meter tower is scheduled to open next year.
“Currently there are talks ongoing about leasing, and the type of tenants we’d like to attract are in banking, and financial sectors, high-end manufacturing and services sectors,” Grace Zhu, Shanghai Tower’s spokesperson, was quoted as saying in an emailed response to questions.
The owners of Shanghai Tower, which include state-backed entities Shanghai Chengtou Corp., Shanghai Lujiazui Finance & Trade Zone Development Co. and Shanghai Construction Group Co., started construction of the tower in November 2008.
Leasing the space will not be easy as China’s economic slowdown in China may keep demand subdued.
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