The opening of the Disney Resort in Pudong is set to give Shanghai's retail and property sectors a massive boost

The start of the new year has been a busy time for Lu Jianxin, a real estate agent with Shanghai Huayu Property. He has been getting about 50 phone calls a day as hundreds of people have been eager to find out if he can help them find retail properties near Shanghai Disney Resort, which is scheduled to open this summer.

Lu's response to most of them has largely been the same - that they should have acted earlier.

China's very own Disneyland will be open after more than six years of construction and preparation. Photos Provided to China Daily

More than 10 million people are expected to visit the highly anticipated Shanghai Disneyland in 2016, which will feature a theme park, two hotels and a range of lifestyle and retail options.

"Supplies of retail properties are really limited now and prices have more than doubled in the past 12 months. Obviously, investors believe that even a 10-square-meter space for a noodle stand will be really profitable if it is close enough to the Disney resort," says Lu.

After more than six years of construction and preparation, Shanghai Disney Resort is set to welcome its first visitors on June 16. This particular date was chosen because the number six - deemed as auspicious and symbolizing success -appears several times.

According to data from Centaline Property Agency, the average price of commercial properties within a 5-kilometer radius around Shanghai Disney Resort have grown more than 300 percent in the past five years, from some 20,000 yuan ($3,000; 2,700 euros) per square meter in 2011 to a peak of 72,000 yuan in January. This phenomenal growth rate was among the highest in Shanghai, similar to those in prime locations such as Nanjing Road, Huaihai Road and Lujiazui.

In comparison, the average price of residential properties in the same area doubled from 20,000 yuan per square meter to 40,000 yuan per square meter in the same period.

"Surging prices of commercial properties are a result of limited supplies and high demand. We estimate that the prices may grow further but at a more steady pace in the second half of 2016 after the opening of the resort," says Joe Zhou, head of research for JLL East China.

Real estate professionals also believe that the opening of the resort will help boost retail consumption across the entire city. The Disney resort is expected to receive more than 10 million visitors in the first year, and the brand would as a result generate more than 45 billion yuan across all its businesses in the city, according to a report by commercial property services company RET.

When 70 million people visited the 2010 Shanghai Expo, the combined consumption exceeded 48 billion yuan, according to data from Shanghai's statistics bureau. The expenditure on dining alone was more than 2 billion yuan. Market insiders said that Shanghai Disney Resort's impact on the retail market may be even more obvious because the resort is a permanent facility that can attract visitors to stay in the city for longer periods.

Lu Wenxi, manager of Centaline Property Agency, estimates that for every 1 yuan spent on admission tickets to the Disney resort, another 8 yuan will be spent on dining, hotels and franchised products.

"Just consider the more than 10,000 employees who work in the resort and their day-to-day consumption in the neighborhood. The combined size is huge, and it will not only benefit the resort, but also the city," says Lu.

Siu Wing Chu, head of retail at Savills China, says key retail hubs in Shanghai, including Yuyuan Garden, the Bund, Huaihai Road and Nanjing Road, have all made adjustments to their branding to capitalize on the impending Disney craze.

"We have seen several franchised Disney product stores scattered around Shanghai, and we believe that visitors to the Shanghai Disney Resort will also visit sightseeing locations such as the Bund, Nanjing Road and Yuyuan Garden area. We expect obvious growth in rental in these key locations," says Chu.

Analysts also add that the urban infrastructure in the Shanghai Disney Resort and its neighboring areas will further facilitate traffic dining, accommodation and shopping areas. Numerous department stores and shopping outlets are also under development around the resort as retailers aim to tap into the massive number of visitors.

One of these shopping options will be provided by retail outlet developer Value Retail and Shanghai Shendi Group, the operator of Shanghai International Tourism and Resort Zone (SITRZ). The group announced in 2014 announced a joint venture to build a luxury shopping compound next to the Shanghai Disney Resort. This mall, Shanghai Village, would measure 50,000 sq m in size and host more than 100 brands.

The tourism zone is in Pudong New Area and covers 20.6 square kilometers. It includes 13 sq km of space comprising hotels, restaurants, parks, as well as entertainment and sporting facilities. It is linked to the city center by two subway lines.

Hotel operators, including budget chains such as GreenTree Inn and Jinjiang Inns, have also been quick to develop new properties around the Disney resort. According to Pudong district authorities, as many as 1,000 B&B rooms may be available in the holiday villages located near the Disney resort.

wuyiyao@chinadaily.com.cn

Shanghai Disney Resort

Opening day: June 16

Investment: $5.5 billion

Location: Pudong New District

Start of construction: April 8, 2011

Target population: 330 million people within a three-hour drive or train ride of Shanghai

Resort size at opening: 3.9 square kilometers

Park: Shanghai Disneyland (including back of house areas), approximately 910,963 sq m, or 1,160,000 sq m if the parking lot is included

Accommodation: One deluxe hotel and one value hotel with a total of 1,220 rooms

Retail, dining & entertainment Size: 46,000 square meters (gross floor area), 27,900 square meters (gross leasable area)

Additional facilities: Lake, other outdoor recreation zones, parking and transportation hubs

Source: Shanghai Disney Resort

( China Daily USA 01/29/2016 page8)