Xintiandi

xintiandi
Project box

Geographical area: Asia and the Pacific

Location: Shanghai, China

City size: XL (above 5,000,000 inhabitants)

Promoter: Regional Government of Luwan

Developer: Shui On Land Limited, Municipality of Shanghai and Regional Government of Luwan

Start year:

End-year:

Implementation phase: Completed

Project size: Neighborhood

Total area of intervention (in sqm): 30.000

Total investments (in USD): 175 million

Project overview

Xintiandi is a central historical district of Shanghai, located in the Taipingqiao neighborhood. The redevelopment project covered an area of two blocks spanning around 30,000 sqm and characterized by the present of ancient Shikumen buildings. The restoration of the two blocks is included within the redevelopment of the entire neighborhood under the 365 Program, covering an area of around 520,000 sqm. The 365 Program was a wider regeneration initiative started in 1992 by the Municipality of Shanghai which targeted the renovation of around 3,650,000 sqm of shanty houses across the entire city. Being an historical part of the city center, Xintiandi was largely inhabited by lower-middle income families living in traditional low-rising and low-density Shikumen buildings. However, as in several districts across the city, the old residential buildings were characterized by small housing units and extremely low living conditions, thus harming the wellbeing of their residents. Therefore, the site has been included in the wider redevelopment initiative of 365 Program to improve the living conditions of residents, preserve and conserve the historical trait of the neighborhood and to provide the city with a new commercial and entertainment district. The project started from the initiative of the District Government of Luwan, where Xintiandi is located, which directly contacted the private development company Shui On Land to redevelop the area of Xintiandi. The two entities worked together and appointed the architectural firm Skidmore, Owings and Merrill to develop the entire masterplan of the intervention. The masterplan was completed in 1996 and submitted for approval to the Urban Planning Administration Bureau of the Municipality of Shanghai. After its approval in 1997, Shui On Land and the District Government of Luwan signed an agreement to detail the area of the intervention and the conditions to receive development rights. Through this agreement supervised by the Municipality of Shanghai, Shui On Land paid a development fee to the Municipality and the District Government of Luwan in order to receive the development rights on the district site. The planning phase also saw the participation of the public company Fuxing Construction Development Company. The public company owned by the District Government of Luwan established a public-private partnership with Shui On Land to support the private company with the administrative paperwork and the approval processes from both the District Government of Luwan and the Municipality of Shanghai. The masterplan detailed the restoration intervention on the ancient buildings and the construction of new buildings hosting residential units, commercial activities and entertainment venues. The implementation phase of the redevelopment kicked off when the Municipality of Shanghai started issuing the permissions and land use changes to Shui On Land following the block-by-block land transfer and development detailed in the masterplan. Then, Shui On Land and the District Government of Luwan started the demolition and relocation of the existent residential buildings with a specialized company appointed by the District Government. The residents were offered to relocate in other districts of the city or were offered compensations to move back to Xintiandi after redevelopment. The construction and redevelopment work in the two blocks of Xintiandi started in 1999 and concluded in 2001. The intervention refurbished and renovated the traditional style buildings, which were converted into commercial and retail spaces, hotels, and residential units. In addition, the Initiative also constructed a new shopping mall to ensure stable profits for Shui On Land. The regeneration efforts were able to improve the living conditions of the district residents, ensuring the compliance with setback, fire hazard and sanitation requirements. With the aim to create a new commercial and entertainment district, the redevelopment of Xintiandi brought significant economic impacts for the local community. National and international businesses decided to relocate within the district, generating important employment opportunities and taxes paid to both the District Government and Municipality of Shanghai. In addition, the increased attractiveness and restoration of the ancient buildings increased the number of tourists incoming, with 30,000 daily visitors during holiday periods. Lastly, the redevelopment of the Xintiandi district became a model for the relocation and restoration of historical buildings followed by other city mayors across China. The success of the redevelopment project in transforming the area into a vibrant and economically thriving district has inspired other cities to adopt the Xintiandi development model, sparking significant redevelopment projects across the city and the country.

Envisioned as a mixed-use district, the redevelopment initiative implemented residential buildings, offices, commercial spaces and hotels. In addition, the initiative allocated a smaller part of the area to open spaces for recreational activities.

Benefits

The redevelopment of the Xintiandi district brought important economic benefit and growth to the local community and the city. The creation of high-end restaurants, clothing stores, entertainment venues, and nightlife activities in the area led to a significant influx of tourists, with daily visitors reaching up to 30,000 during holiday periods. This increased attractiveness brought national and international companies to relocate to the newly developed district, generating substantial value for the neighborhood and providing new job opportunities. In addition, the government benefitted from the increased revenues generated by the higher taxes paid from new businesses and residents moving into the district. The redevelopment of the entire neighborhood boosted an enormous increase in real estate value. The average selling price of luxury residential housing soared by 690% between 2002 and 2012. However, this surge in property value also created social tensions between residents, developers, and the local government. In fact, the important increase of property values led residents to demand higher relocation compensation to the government and private developers, lighting debates between the local community and the project developers.

By renovating the existing buildings located in the district, the initiative avoided creating new buildings on other sites, thus reducing soil usage. In addition, the redevelopment of the Xintiandi district and the renovation of existing buildings reduced emissions given by the construction of new buildings. Lastly, the redevelopment of Xintiandi is connected with the redevelopment of the entire Taipingqiao neighborhood which saw the implementation of several green areas as established by the Municipality of Shanghai policy to increase green area ratio.

From the social perspective, the district has been converted into one of the most important venues for events and social activities in Shanghai. The district is now hosting important national and international events, such as the Shanghai Annual International Fashion Show and the Asia-Pacific Economic Cooperation Annual Meeting. The most important social impact brought by the redevelopment is the preservation of the Shikumen buildings. The project successfully restored the ancient buildings located in the district, preserving its original structure and historical characteristics. Besides these positive effects, the regeneration initiative brought to the gentrification of the district. Despite the compensations offered, previous low-middle income residents were unable to relocate to the newly developed buildings of the district due to the significant rise in housing prices.

The Xintiandi redevelopment did not receive any certification.

Finance model

The redevelopment of Xintiandi saw the participation of public funding from the Municipality of Shanghai and the District Government of Luwan, and private funding from Shui On Land. In addition, Shui On Land created a public-private partnership with the real estate public development company Fuxing Construction Development Company, owned by the District Government of Luwan. The public company supported Shui On Land with the administrative paperwork and the approval processes from both the District Government of Luwan and the Municipality of Shanghai.

The private company Shui On Land financed the redevelopment project with private resources. The company also paid development fees to the Municipality of Shanghai for the estimated relocation compensation of residents, the infrastructure development and the construction of local amenities. In particular, Shui On Land was required to provide exactions to fund the maintenance of green areas and the artificial lake of the Taipingqiao neighborhood. The relocation compensation paid by Shui On Land is estimated to be around USD 78 million. The company also paid a fee to the Municipality of Shanghai to obtain the development rights on the site. The Municipality of Shanghai modified the land use on the site following the masterplan. The total cost of the regeneration project of Xintiandi is around USD 175 million.

References and Credits

Amirtahmasebi, R., Orloff, M., Wahba, S., & Altman, A. (2016). Regenerating Urban Land: A Practitioner’s Guide to Leveraging Private Investment, World Bank Group, Washington DC. Availabe here.

Shui On Land (2022). Annual Report 2022. Available here.

Shui On Xintiandi. Shanghai Xintiandi Project. Accessed on 31/07/2024. Available here.

Image from Xintiandi, retrieved here.