Shanghai’s West Bund, a dynamic 11-kilometre-long waterfront stretch in the southwestern Xuhui district, is defying China’s wider property sector malaise by drawing major multinational corporations and luxury retail brands to its growing commercial hub. Rapid development, strategic planning, and high-profile investment are transforming the zone into the city’s newest central business district (CBD), outpacing many other parts of the capital in terms of occupancy and appeal.
Since redevelopment began in 2010, the West Bund has undergone a dramatic transformation into a modern urban district, blending premium office towers, luxury retail outlets, upscale residences, and cultural venues. Central to this revitalisation is Hongkong Land’s flagship Westbund Central project, a landmark mixed-use development that integrates office space, retail, hospitality, and residential units across more than 1 million square metres of gross floor area. The developer acquired the site for 31.1 billion yuan (US$4.3 billion) in 2020.
The district has quickly captured the attention of global corporates. BMW and Adidas are among the latest multinationals to establish operations in the area, drawn by its modern infrastructure and seamless work-life environment. The West Bund is also home to the Shanghai Foundation Model Innovation Centre (SMC), a key government-backed artificial intelligence (AI) incubator launched in 2023. The facility has attracted more than 100 AI-focused start-ups, including Intel partner ModelBest, energy solutions provider DaMao AI, and image-generation platform LibLib.
President Xi Jinping’s visit to the SMC in April underscored the strategic significance of the area to China’s AI ambitions. During the visit, he emphasised the nation’s strong outlook for AI innovation, citing abundant data resources and a robust industrial framework. The SMC offers technology firms a comprehensive support package that includes computing power, proprietary datasets, legal consulting, and funding sourced from a trio of major investment funds: the 60 billion yuan National AI Industry Fund, the 22.5 billion yuan Shanghai AI Fund-of-Funds, and the 20 billion yuan Xuhui Capital industrial investment fund.
Market analysts note that the district’s success reflects deliberate urban planning and strategic sector alignment. “West Bund is well planned as each section has its own theme and industrial goal,” said Jimmy Chu, Senior Director at CBRE’s Eastern China office market division. He added that the location is becoming a rare bright spot in Shanghai’s broader commercial property landscape.
The office component of the Westbund Central development, scheduled for delivery later this year, has already recorded strong pre-leasing activity and is expected to achieve full occupancy, despite challenging macroeconomic conditions. As of June, Shanghai’s overall office vacancy rate stood at 22.4 per cent, marginally up from 22.1 per cent at the end of 2024, according to CBRE.
Joseph Wang, Head of Tenant Representation for Office Leasing at JLL Shanghai, observed that the West Bund’s positioning goes beyond traditional business districts by promoting lifestyle integration. “The West Bund is more than a CBD since it offers people work-life balance,” he said. “Developments in the area have driven up leasing deals in the city’s office market.”
The district has also garnered international attention. Michal Bartek, Vice-Chairman of Slovakia’s National Council, expressed admiration for the innovation on display during a recent visit. “It is really important for my country to cooperate with China in this industry,” he said. “AI offers us great opportunities in industrial development.”
Bartek’s remarks came during a diplomatic visit to China ahead of the Global Civilisations Dialogue Ministerial Meeting in Beijing, part of a wider effort to deepen global engagement in China’s technology and innovation ecosystem.
Investor sentiment remains strong, with many viewing the district as a showcase for Shanghai’s modernisation and economic opening. “The Shanghai government has singled out the West Bund as a showcase of the city’s modernisation and opening up,” said Yin Ran, an angel investor based in the city. “The success of the riverfront area will attract more companies and investors in the coming two to three years and other central business districts will feel the pressure as they may lose tenants to the West Bund.”
As other business districts contend with rising vacancy and weaker demand, the West Bund’s upward trajectory could offer a model for urban renewal and sector-specific economic clustering in China’s next chapter of development.
-SCMP
