Shanghai Mystery Ends: Trendy Xintiandi To Gain “Red” Tourist Attraction

A stylish stone building is suddenly demolished at one of Shanghai’s most popular tourist and nightlife spots, Xintiandi. Nearby, land astride one of the city’s largest man-made lakes is walled off; part of the lake itself is filled in and a huge new construction project is started. It was all a mystery when it began earlier about four months ago.

The cloud lifted at the end of August.  A new memorial to compliment the First National Congress of the Communist Party of China is being built ahead of the 100th anniversary of the Communist Party in 2021.  Construction work formally began on August 31, according to a government announcement.  It will be completed in 2020, and opened to the public in 2021.

Xintiandi, the lake and an adjacent park are part of a larger development area called “Taipingqiao” launched in 1996 by Hong Kong developer Shui On Land.  Its 22-blocks are part of a swath of central Shanghai popular among Hong Kong developers in the 1990s when the city was in the early phase of the country’s post-Mao reform era. The then dilapidated residential area covered with distinctive “longtang” residences and “shikumen” stone-framed gates has become been a trendy, award-winning landmark since its completion in 2001. Thousands of visitors pass daily by retail shops that include Burberry, Sephora, Tom Ford, Swatch. Lululemon, Tesla and Bose.

The demolished building’s two shops were “successfully relocated in support of the relevant government departments,” Shui On Land said by email in June. “We believe that the expanded Site will receive more visitors who wish to pay tribute to and remember the great development history of the Party. We also believe that under the leadership of the Party, Shanghai will have a brighter future.”

The site of the first congress already is a popular tourist attraction, reportedly receiving 1.5 million visitors last year. Its popularity is part of what state media says is growth in “red tourism,” or visits to key landmarks associated with China’s 1949 revolution. The new memorial in Shanghai will have more than 2,000 square meters of space above ground and 6,000 below. The first party congress attracted 13 delegates and 50 party members in 1921.

Hong Kong-listed Shui On Land, led by billionaire Vincent Lo, has of late still been increasing its own bet on the long-term success of the area. In December 2018, Shui On Land paid 3.4 billion yuan, or about $478 million, to buy 21.9% of China Xintiandi that it didn’t already own from Brookfield, an affiliate of Brookfield Asset Management. In May it finished an “asset enhancement” program of nearby Shanghai Xintiandi Plaza, set on fashionable Huai Hai Road, which was recently renamed from the previous Shui On Plaza.  Last year, Shui On Land formed a joint venture to build one of Shanghai’s largest towers with government-controlled China Pacific Life Insurance and Shanghai YongYe Enterprise. The occupancy rate of Shui On Land’s properties in the entire Taipingqiao area – including Xintiandi, Xintiandi Style, Shui On Plaza and Xintiandi Plaza – was 97-99% as of June 30 this year.  That popularity contributed to 8% increase in profit in the first half of the year to 1.6 billion yuan for Hong Kong-listed Shui On Land.

Like the Shanghai district around Xintiandi, Shui On Land is in a process of evolution, too. Lo, the chairman, is grooming his 36-year-old daughter Stephanie Lo for leadership in the future. She sits on Shui On’s board as an executive director and holds top operational duties at Xintiandi.

Xintiandi won an award from the prestigious Urban Land Institute in 2003 for its design. Shui On and will pick up another two at a ceremony in Washington, D.C. this month. One is for Knowledge and Innovation Community, a development that combines office, retail and research space. The other is for a Lingnan Tiandi, an Xintiandi-inspired project in the southern China city of Foshan. (See related story here.) The two for Shui On Land are among a total of 11 to be presented.

Follow me @rflannerychina

This post first appeared on Forbes.com. To see the original, click here.