Shanghai yesterday issued a guideline to investors and government authorities on land use in industrial parks and warned against wasting land.
The guideline, which specifies land-use criteria such as plot ratio (rate of floor area against land area), output value per square meter and investment per square meter, is the first of its kind in the country, city government officials said.
"Shanghai is short of land and the quality of new industrial projects will directly cast an impact on the future development of the city," said the guideline.
Floor area for industrial parks should be no less than 30 percent of the total land approved for the project, higher than the national requirement of 26 percent.
The higher requirement is in line with the type of projects attracted to the city, analysts said.
"Shanghai's industry parks is transforming from simple manufacturing to high-tech investment. Such projects, unlike heavy industry and warehousing, can be located in tall buildings. So it's possible to achieve the higher plot ratio," said Dai Qin, an industrial property analyst with real estate consulting firm CB Richard Ellis.
The total area used for administration, residential and service use should not exceed more than 5 percent of the total project, according to the new guideline.
The guideline, based on a six-month survey of 10,000-plus industrial firms in the city, offered a long list of stipulations on 33 sectors. It will help government authorities decide whether to bring in a certain project.
"It's not a compulsory rule, but it will be a factor in our assessment of approval for certain industrial projects," said Zhou Qiang, an official with Shanghai Economic Commission, the body in charge of industrial parks.
As the guideline has been on trial in Songjiang District, where a number of export-oriented manufacturing firms are located, it helped reduce 296,081 square meters of vacant land, or 6.1 percent of the total industrial parks, there.
The new guideline is believed to be in line with the overall macro-economic control and avoid investment overheating as it will help weed out unqualified projects.
"The approval of industrial park land is getting tighter. It used to be easy for investors to get as much land as they wanted, but now it's different. They can only be approved when they meet the criteria," said CB Richard Ellis' Dai.
In shanghai, the output value per square meter of industrial parks is only one-third of that in New York, Chicago, Osaka and one-fifth in Tokyo.
The city currently hosts around 100 industrial parks, insiders said.