Global real estate investments and local cultural capital in the making of Shanghai's new office locations

Liberalization and internationalization of financial markets have had profound impact on international capital flows and consequently on international real estate investment. International real estate investment takes place following the evaluation of market fundamentals and institutions of the recipient localities. Shanghai's favorable economic fundamentals do not, however, adequately compensate for its uncertain evolving market institutions, judged by the western real estate investors who are conspicuously absent from the city. Nevertheless, Hong Kong developers have played a leading role in the development of office centers in the old quarters of Shanghai, which has significantly altered the city's office location pattern. The paper discovers that understanding the intangible cultural capital embedded in the old Shanghai's past helps to build up inward Hong Kong developers’ confidence in the city. Confidence as well as competitive advantages make Hong Kong real estate capital a leader in remaking Shanghai office locations.