Shanghai’s apartment rents and hotel room rates near the World Expo site fell as much as half as China’s biggest international event this year ended.
Rents on a two-bedroom apartment in the neighborhood, which fetched from 6,000 yuan ($900) to 10,000 yuan a month during the showcase that ended Oct. 31, have fallen 50 percent, said Chen Yi, manager of the Expo branch of Centaline Property Agency Ltd. Hotel rates declined as much as 47 percent last month from October, according to Qunar, China’s largest travel website tracking the city’s 2,000 hotels.
The six-month event attracted a record 73.1 million visitors, driving up rents and hotel rates especially within 3 square kilometers (1.2 square miles) of the site on the banks of the Huangpu river, Centaline said. With rents falling, property owners are now turning to the improvements made to the area as a selling point after more than 270 billion yuan of spending on infrastructure.
“Rents for homes near the Expo park were largely affected by the influx of short-term visitors and workers this year,” said Qu Anxin, a Shanghai-based researcher at Centaline, the city’s biggest brokerage for mid- to high-end homes. “It’s a nice and convenient area to live, especially after the government built up the subway lines and shopping malls.”
Authorities in Shanghai built two airport terminals and undertook a three-year renovation of The Bund, the city’s colonial-era waterfront boulevard, lined with historic buildings, across the river from the Expo park. China’s richest city also accelerated its expansion of the subway system to more than 400 kilometers to cater to the influx of visitors, making it the biggest city transport underground network in China.
The Expo park is spread across 5.3 square kilometers, with part of the site lining the eastern side of the Huangpu river, based on data from World Expo’s official website. The exhibition, with pavilions from about 190 nations from the U.S. to North Korea, may lift Shanghai’s economic growth to more than 8.5 percent this year from 8.2 percent in 2009, the Shanghai Academy of Social Sciences estimates.
Revenue from home rental transactions at Centaline’s Expo location fell 80 percent after the event ended from the peak in April, said Chen. Apartment leases are now signed for at least a year rather than three to six months previously, he said.
Some rental rates that tripled during the Expo have fallen back to the level at the start of the year, said Huang Hetao, a researcher at Century 21 China Real Estate, which has 280 branches in Shanghai, the most in the city. Rents have dropped by an average of 20 percent since the end of the event, he said.
“Landlords would rather cut rents than leave the apartments empty,” he said.
Five-star hotels reduced room rates to an average 1,300 yuan a night in November from 2,200 yuan in October, Qunar said in an e-mailed statement.
“Hotel rates fell back quickly to the level of last year, which was the worst time when the financial crisis hit the industry,” said Joseph Wang, senior director of the company’s hotel product department. Room rates in May, July, August and October set new highs for the Shanghai hotel industry, Qunar said in the statement.
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