Fri, November 06, 2009
Industries from real estate to tourism are expected to rake in higher profits due to the newly-approved Shanghai Disney project, analyst said Thursday.
The Shanghai municipal government confirmed Wednesday that the world's sixth Disney-themed park would be set up in Shanghai. The local government did not reveal details on the project, however.
Several industries and listed companies should benefit from the project, Tu Jun, an analyst with Shanghai Securities, told the Global Times.
Hong Kong Disney can be used as a predictor for the potential impact of the Shanghai project, Tu said.
Real estate, construction, and tourism all benefited as soon as the deal was signed. And commercial retail, catering, and transportation made gains when building began. Industries like printing and media started seeing higher incomes when the theme park was officially opened, Tu said about the Hong Kong project.
Home prices have already risen in the area around the planned park, Zhang Qi, an analyst with the China Index Academy, a real estate research institute, told the Global Times.
A property close to the park venue was sold for 1.19 billion yuan ($174.27 million) Wednesday, with a surprisingly high rate of land premium at 264 percent.
Home prices in Chuansha area, near the project, surged from 3,000 yuan ($439.33) per square meter in early 2004 to 14,000 yuan ($2,050.20) per square meter today, Shanghai Securities News reported.
Listed companies that own property near the planned park saw share prices go up recently, as investors became more confident in the project.
Local construction companies such as Shanghai Pudong Road and Bridge Construction, and Shanghai Construction Group are to benefit substantially as well, Tu believes.
The construction industry will only see increased profits once, but tourism and other related industries are likely to enjoy sustainable growth, said Tu.
The China Index Academy's Zhang added that the project will only help a small slice of the Shanghai real estate market, however, and have little long-term impact.
The hotel industry will also gain from the growth in tourism.
Primarily budget hotels are looking to take advantage of the new park, Xu Zurong, president of Jinjiang Inn based in Shanghai, was quoted by Shanghai Securities News as saying yesterday. “We plan to open new locations in Shanghai, some of which are to be set up in the park's vicinity. ”
Local retailers that offer Shanghainese specialties have seen share prices soar due to the announcement that the park will be themed around the coastal city, said Tu.
