SHANGHAI’S EMPTY SKYLINE
Some cities have a soundtrack. Hanoi has hooting mopeds, Amsterdam has bicycle bells, Istanbul has prayer calls. Shanghai has the relentless percussion of jackhammers, bulldozers and cranes. The developers are definitely winning the real estate battle.
The irony is that many of the buildings, once up, stay empty. Dusk in Shanghai leaves whole tower blocks black. Estimates have put urban household vacancy rates at 23% in China’s biggest cities – roughly 600 million square metres of unoccupied floor space. One independent survey based on “black room” counts put the vacancy rate in Shanghai at closer to 50%.
Vacancy is particularly visible in some of the more flamboyant flops in Shanghai’s recent construction history, such as the ghostly ‘Thames Town’ (complete with chip shop, Harry Potter statue and castle ruins) or the $200 million Shanghai Pentagonal Mart, now China’s largest vacant building. Pudong is littered with empty blocks, and frankly even the luxury malls on West Nanjing Road are deserted most days. It’s all a bit post-apocalyptic.
So why won’t they stop building? In many ways, Shanghai is a showpiece city, a symbol of China’s achievements for the outside world. ‘Conspicuous development’ has become government policy here, helping impress foreign visitors and boost investor confidence. The stunning metamorphosis of Shanghai’s skyline over the past 20 years has been as much about prestige as space.
There’s also the small matter of China’s obsession with GDP targets. Land sales for redevelopment raise hundreds of billions of dollars for local governments every year – allowing local officials to boost GDP, and in turn, secure themselves cushy party promotions.
And so the development binge continues. Contracts are signed, careers are made, pockets are filled. Everyone’s a winner, except for those lilong families who can no longer afford to live within 100km of their historical roots.
For a deeper analysis on China’s overheated property market, read my sister Jane McMullen’s brilliant article for the BBC, here.