In other sectors, offices continued to dominate the acquisition of en-bloc buildings last year.

"Landmark office buildings in most of the major Chinese cities saw significant rental growth throughout 2007 while several major office transactions and leasing occurred in Shanghai," said Edward Cheung, DTZ's chief executive officer for mainland China.

For instance, AIA leased 7,700 square meters in Chong Yu Building in Changning District in Shanghai with rent of 147.8 yuan (US$20.8) per square meter per month, and Tower 1 of IFC in Shanghai was sold for 2.585 billion yuan (US$363.59 million), or 48,777 yuan (US$6,860) per square meter.

According to DTZ's latest global office occupancy costs survey in January, Shanghai (Pudong) and Shanghai (Puxi) ranked at 25th and 31st respectively, the highest ranking among all Chinese mainland cities.

The office market in Shanghai has benefited from the active FIRE (finance, insurance and real estate) sectors, which generated strong demand that drove vacancies to a historical low, the report said.

Meanwhile, mixed-use projects, retail and industrial/logistics investment transactions all recorded a boom last year, accounting for 310 transactions out of the total 658.

Major deals included the Donghua Plaza in Beijing which was sold for 5.8 billion yuan, or 9,667 yuan per square meter, as well as Phase II of Waigaoqiao Bonded Logistic Zone in Shanghai, which was acquired for 1.5 billion yuan, or 5,837 yuan per square meter.

And a land plot in Chengdu was bought for more than seven billion yuan - the highest price for a retail land plot in China - by Hong Kong's Wharf (Holdings) Ltd.

An increasing number of Hong Kong developers have been bidding for prime commercial land on the Chinese mainland, due to relatively cheaper land prices, DTZ has found.

"By doing so, these developers are actively increasing their land reserves in the Chinese mainland," Cheung said. "We expect more regional mega shopping malls, different from traditional department stores, to come on stream within the next two to three years."

(Shanghai Daily March 4, 2008)