Citigroup's property unit has purchased four office blocks in Shanghai's former low-rent industrial district of Zhabei for about US$65 million, a source familiar with the deal said Wednesday.

The office blocks, 38,000 square meters in total, are part of the 250,00-square-meter Live Hub commercial complex in the Daning area.

The complex was built by Hong Kong developer Chongbang Group and is near Yanchang Road Metro Station on Line 1.

Despite a slowdown in the residential sector under the government's austerity measures, office and retail property in Shanghai have remained active given steady economic growth.

Shanghai's residential market reported a 27 percent drop in transactions and a 2.2 percent drop in prices last month from a year ago, continuing a downward trend that started in June.

However, multinationals continue to expand businesses and retailers are eager to enter the market - thus the rental market has remained strong.

The Live Hub complex has leased more than 80 percent of its retail space since completion in the middle of this year. Tenants range from Starbucks to sportswear giant Nike and middle range fashion brands.

Shanghai Huaxu Investment Co, developer of Plaza 336, a new shopping complex in People's Square near Raffles Plaza and Shimao Brilliance Plaza, said it has a long waiting list of would-be tenants even though it will not start operation until the first quarter of next year.

For existing properties, Shanghai Times Square on Huaihai Road M. has succeeded in raising retail space rents at least 50 percent this year by upgrading its mix of tenants amid robust demand from luxury retailers.

After embracing Spanish fashion giant Zara's second store in Shanghai last month, the shopping center will soon welcome Italian fashion brands MaxMara and Maxco.

Citigroup also acquired a 75 percent stake in Novel Plaza's prime office building in People's Square for US$50 million in November.

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