Real Estate Demand: Out With the Old, In With the New

Geoff Dyer, in a recent Financial Times article, highlighted a statement from Qiu Baoxing, China’s somewhat outspoken vice-minister for construction, in which Qiu expressed disgust with the thoughtless destruction of historically significant buildings that is occurring in many of China’s cities. Qiu Baoxing has established himself in previous years as being a very prominent Chinese official who is not afraid to make candid statements about the challenges that China faces with regards to sustainable development and energy efficiency. This recent reflection on the state of development in China is consistent with this willingness to be straightforward and also raises the very important issue of how to reconcile China’s push for modernity with the necessity to preserve the country’s increasingly few historically significant buildings.

The need for preservation of historical buildings is especially important in today’s China where the country’s youth are increasingly disconnected with their own Xintiandihistory. Although some of these buildings have roots in Western and Japanese imperialism and expansionism, they are everyday reminders of many of the political forces that shaped the China of today. The primary obstacle to protection though, is that it is not economically feasible in the vast majority of Chinese cities for a developer to preserve a historical structure. Local developers understand local demand and in their drive for commercial success what results is almost always something that is new, high-rise, and from a Western perspective, often gaudy.

Shanghai is the exception as developers and investors have found ways to make historical preservation a commercial success. The Bund is home to several redeveloped 1920s buildings that cater towards the city’s wealthy expatriates and elite Chinese, and Xintiandi exemplifies what can happen when a powerful developer (Hong Kong’s Shui On Land) partners with a skilled architect (Benjamin Wood) to take a historical area and make it new. Xintiandi certainly does have its critics, but if it had not been redeveloped it almost certainly would have been demolished, and many feel that the project brought attention to the city’s dwindling number of Shikumen houses and eventually led to government protection for many of the original structures that still remain.

Beijing’s consumers and developers are also starting to catch onto the fact that redeveloped preserved structures have atmosphere and appeal that simply cannot be created in a new building (the Nanxincang redevelopment and Beijing Legation Quarter project are examples). Unfortunately though, some feel that many of the capital’s historic areas are beyond repair and more importantly, it is far more expensive to preserve a historic building than to tear it down and rebuild it or replace it. As such, one can’t expect investors and developers to take the lead on preservation, at least until consumer demand evolves to the point where historic buildings are seen as elegant and tasteful as opposed to simply old. In the meantime, responsibility falls to the governement.

One Response to “Real Estate Demand: Out With the Old, In With the New”

  1. A timely summary (http://time-blog.com/china_blog/2007/06/new_beijing_eating_part_ii_hig.html) was recently posted on the Time: China Blog about the Beijing Legation Quarter project which is being redeveloped by Beijing Lawyer Handel lee into a collection of ultra high end eateries, clubs, and perhaps, boutiques. Handel Lee was also behind 3 on the Bund down in Shanghai and Beijing’s Courtyard Restaurant and art gallery. The success (or lack thereof) of this project will be a telling indicator with regards to whether or not there is demand in Beijing for this sort of redevelopment project.