China Insight - 走进地下空间

Investment Rating - The report indicates a positive outlook for investment in underground commercial spaces in Shanghai, driven by urban land scarcity and government regulations promoting underground space development [7][66]. Core Insights - The report emphasizes the growing interest in underground commercial spaces as a solution to urban land constraints, with Shanghai leading in this sector through proactive policies and planning [6][7][66]. - It highlights the historical development of underground commercial spaces in Shanghai, noting significant projects and their impact on urban dynamics [28][29]. - The analysis includes a SWOT assessment, identifying strengths such as high foot traffic and direct subway access, while also addressing weaknesses like shopping environment and management practices [45][50][52]. Summary by Sections Introduction - The report discusses the increasing attractiveness of developing and managing high-quality underground spaces in densely populated urban areas, with Shanghai as a key example [12][13]. Policy as a Driver of Reform - Shanghai has implemented regulations to enhance the planning and management of underground spaces, showcasing its forward-thinking approach [7][23]. Development History - The report outlines a timeline of significant underground commercial projects in Shanghai, starting from the Hong Kong Plaza in 1995 to the latest developments [28][29][34]. Performance Analysis - A comparative analysis of rental rates and occupancy rates between underground and above-ground commercial spaces reveals that underground spaces generally perform lower, with an average rental rate difference of RMB 46.1 per square meter per day [38][39][40]. Outlook - The report forecasts a more aggressive and successful development of underground spaces in major Chinese cities as land above ground becomes increasingly scarce [66][68].