Capitaland China has set a premium price for rents at its new retail mall at Shanghai's downtown to exploit the strong demand for retail areas in the city.

The daily rent for its eight-story mall in Raffles City Shanghai, which opened on Saturday near the People's Square, hit US$5 per square meter - almost 18 percent higher than the average price in the city's prime commercial centers, according to Centaline Property Agency Ltd, a Hong Kong-based real estate research firm.

The Singapore-based company also said it has leased out 98 percent of its retail area in the mall. A 51-story Grade-A office tower within the same building is expected to open by the end of this year.

With the opening of Raffles City Shanghai, CapitaLand now manages 13 malls in Asia Pacific. It has invested approximately 12 billion yuan (US$1.45 billion) on the Chinese mainland, including residential and commercial projects, since its entry in 1994.

Retail rents in the city's major commercial centers have risen from 33.4 yuan per square meter in July, with August registering an increase of 2.6 percent in the average daily rent while September posted a 2.7 percent gain.

Rents have climbed on the back of strong growth in the local retail business.

Shanghai's retail value in the first nine months hit 163.6 billion yuan, 9.3 percent higher than a year ago.

Centaline's report also revealed that small players pushed up retail rents in suburban residential communities.

The average daily rent for retail outlets in the suburban areas increased 2.3 percent from August to hit 2.31 yuan per square meter in September.

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