Looking for an Office?
By Yves Roulleau
As an entrepreneur, finding an adapted solution concerning your office issue is vital. All the people that have been in China for a certain time know it: the simplest thing can become a nightmare here, it’s all the more true for Real Estate! The commercial Real Estate market is much more organized and professional than the residential market but only top Grade A and Premium buildings have an international professional management. Most of the buildings in Shanghai are managed by local landlords.
As an entrepreneur, you have to face a lot of questions concerning your office: where? How much? Under which conditions, what can I get from my landlord? For how long? Do I really need a Grade A building to register my Rep. Office? … NextStep Answers can help you.
Market presentation:
In Shanghai, you have 3 major central business districts (CBDs):
-The first on in Jing’An, around Jing’An temple and Nanjing West Road with major developments like Plaza 66 Tower I and II, CITIC Square or Parkplace.
-The second in Huai Hai Middle Road and Xin Tian Di.
-The third one in Lujiazui, the financial district with famous buildings like Jin Mao Tower, the Shanghai Stock Exchange, the World Trade Financial Center…
You also have two sub-CBDs:
-The first one in Hongqiao. It was the first CBD in Shanghai to develop but it was soon caught up by the 3 areas below.
-The second one in Xujiahui. The retail activity is very important here and the office leasing has also well developed.
Shanghai counts more than 5,000 buildings; you can find every range of prices.
Market Figures:
The average rent in Shanghai for Grade A is currently estimated at RMB8.4/sqm/day, the two most expensive districts being Jing’An (average asking rental of RMB9.15/sqm/day) and Pudong (RMB8.2/sqm/day).
The average vacancy rate is below 6% for Grade A buildings. The lowest vacancy rate in Puxi are in Luwan (1.4%) and in Xuhui (1.2%) , that’s why the landlords have more and more leverage during the negotiations: we were before in a tenant-oriented market but the trend is now changing. Every year, the rental increase by 10% to 15%, that’s why the landlords are usually reluctant to sign more-than-3-year lease agreements.
More and more MNCs choose to relocate to decentralized locations, especially in business parks, because of the continual rental raise. Nokia, Microsoft or Unilever for instance have already or are about to move out in sub-centers, less expensive and easier to access now thanks to the municipality’s relentless effort to develop transportation infrastructures. For instance, Da Ning district offers very good quality buildings at a much lower rate than downtown.
You can find all the companies who could help you with those on www.nextstepdirectory.com/real-estate
Yves Roulleau, G&T Consulting. This article first appeared on the NextStep Shanghai blog.
August 22nd, 2008 at 4:10 pm
If you are new coming to China, is having the need for a good presentable small shared office site needing 1-2 working places and a place to register your company then I am in the lucky position to have an office where it is possible to register 2 companies and have space for a small start up operations. WOFE or Rep office can register in my office.
I only have my own company registered in Shanghai. Many companies in Shanghai find out that it is only possible to register with an office leased and in place and that can be costly while seeking necessary approvals.
If you are interested in this and my staff can also help you and your company getting well started in Shanghai / Pudong…write to me.
lars@mls-china.com
August 27th, 2008 at 2:48 am
There are also a few shared service offices around, some are very expensive but others are very reasonable. Check out Anken Warehouse, in the Jing’an District. They have modern, flexible offices with all the usual services at affordable prices.
Their website is www.ankenwarehouse.com, or you can e-mail them at info@ankenwarehouse.com.
August 28th, 2008 at 7:07 am
One of the unique things about setting up a business in China is the need for a commercial registration address. If you have not set up your legal structure in China, It is extremely important to keep the expected development of your business in mind when searching for an office as changing your office address can take up to several months and can be costly.
It is also worth noting that many of the serviced office companies that offer ready-to-use office solutions are unable to provide the correct documents for registration. Be sure to ask to SEE the documentation you need before signing leases.
August 28th, 2008 at 5:00 pm
Being quite close of G&T Consulting, where the author, Yves Roulleau, is coming from, they also offer virtual address solutions for new WFOE establishment.
Which means, James, that you actually can have a virtual address for your registration (that will be on all your official documents, and tax registration) but you will be able to move as much as your business grow.
This means that your address of operation can be anywhere, which also means that you can definitely be in a serviced office, business center or like Arken Warehouse mentioned by Sarah.
But, I can just go your way, and say that things have to be planned ahead.
August 28th, 2008 at 7:46 pm
James is perfectly right, that’s why I strongly recommend you to hire a lawyer to view the contract. He will also check out the property certificate, the landlord’s license to lease, etc. I’ve seen to many people first happy to get what they thought to be a good deal and be forced to move out after a couple of months because the landlord didn’t have the right to rent out the space for instance.
September 3rd, 2008 at 1:44 am
If you are looking for a flexible solution, the idea that Sarah and Lars suggested — taking a virtual space or a shared space can be a very good choice.
Another company offering full Class-A shared and virtual space is Regus/HQ. They now have 29 locations in China. http://www.regus.com
Their services are comprehensive and the staff are professional.