Mori Building Sells Five Stories of China’s Tallest Property in Shanghai
Mori Building Sells Five Stories of China’s Tallest Property
Qilai Shen/Bloomberg
The Shanghai World Financial Center stands in Shanghai.
The Shanghai World Financial Center stands in Shanghai. Photographer: Qilai Shen/Bloomberg
Mori Building Co., owner of China’s tallest building, said it sold five floors of the property and may offer more in the tower following demand from investors.
Japan’s biggest privately held developer said it sold the 68th to 72nd floors of the 101-story Shanghai World Financial Center. The 16,248-square-meter (174,828-square-foot) space was sold at an average price of 82,142 yuan ($12,588) per square meter, according to information from government-run Shanghai Real Estate Trading Center, which tracks property transactions.
Mori’s value per square meter is the highest for China’s office space after the Shanghai Port International Cruise Terminal’s record price in the second half last year, according to Cushman & Wakefield Inc. The property brokerage said the city’s prime office rents rose 23 percent in the first quarter, while Colliers International Research said this week Shanghai’s 37.5 million square feet of office space under construction at the end of 2010 was the most among 50 cities worldwide.
“We have been very stubborn not to sell, but we found some clients who wanted to buy higher floors,” Michiho Kishi, spokesman for Mori’s unit that manages the building, said in an interview yesterday, declining to comment on the price. “We didn’t face financial difficulties but it may be better to collect some fresh cash as we prepare for future businesses.”
Mori is still being approached by many buyers for more space in the building, he said. The property is 90 percent filled, leaving the company with “not so many” floors to sell, Kishi said.
Hard to Control
“It is unusual for a landmark building to change hands in portion but not in bulk, because it’ll be hard to control the quality of small owners” said Jack Ye, director of investment for Cushman & Wakefield in China. “If they are aiming for cash, they could have chosen to sell shares of the building.”
The buyers can’t sell or lease the space without Mori’s approval for seven years, said Kishi, who refused to identify buyers. Taiwan’s Tomson Group Ltd. announced the purchase of the 72th floor earlier this year, saying it’s optimistic about the “consequential potential demand for high-end office space.”
Shanghai World Financial Center, completed in 2008, is located in the city’s Lujiazui Finance and Trade Zone. Tenants include banks BNP Paribas Group and Wells Fargo & Co., and accounting firm Ernst & Young LLP.
Mori collected at least 1.3 billion yuan from the space it sold, based on calculations using the data from the Shanghai Real Estate Trading Center. The company may use the capital to expand in China and other markets including South Korea and Taiwan, Kishi said.
China’s investment in real estate rose 34 percent to 885 billion yuan in the first quarter, the government reported last week. Seven transactions took place in Shanghai in the first quarter, totaling 4.6 billion yuan excluding land, with 50.4 percent Chinese, Taiwan and Hong Kong investors, according to a Cushman report.
--Bonnie Cao. Editors: Linus Chua, Malcolm Scott
To contact Bloomberg News staff for this story: Bonnie Cao in Shanghai at +86-21-6104-3035 or bcao4@bloomberg.net
To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net
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