Colliers Int’l East, Southwest China Director, Lina Wong, explains the Expo’s effect on pricing.

What services does Colliers provide?

Colliers International is the third largest commercial real estate services company in the world. It focuses on accelerating success for its clients by providing a full range of services to real estate users, owners and investors worldwide, including global corporate services, brokerage, property and asset management, hotel investment sales and consulting. Colliers likes to say it breeds a culture of knowledge.

How much has the Expo boosted the rental property market?

The Expo’s effect on the residential leasing market has been significant. The high-end residential leasing market saw a vacancy rate drop of almost seven percent. Of these segments, the serviced apartment segment performed strongest. The change in rental rates has not been as significant; however rents are now trending upwards for the first time since the onset of the economic crisis. The pick-up of the resident market is also, if not mainly, contributed to by the strong recovery of the Chinese economy because more companies are hiring expats. It is Colliers’ opinion that, once the Expo concludes the vacancy rate may rise slightly but will definitely not return to pre-Expo levels. Rental rates will likely stay stagnant following Expo with a slight move to the downside as landlords respond to the expected drop in demand.

What lasting effects will the Expo have on the real estate market?

The Expo’s property market effects will mostly be confined to the Expo site and its immediate surrounding area. Prior to Expo, this area was industrial land. Post-Expo this new area will provide a high-end commercial hub with 2-3 million sq. meters of new residential, commercial and retail projects in Shanghai. Residential prices in the adjacent Sanlin area have increased on average 24 percent (yearly) since the announcement of the Expo, while the overall Shanghai market increased 16 percent per annum during this time.

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