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The Huangpu District government aims to add shops, restaurants and recreation facilities to the Bund's solemn hub of banks and insurance companies.

"We are trying to attract global brands to the area to create a high-end central business district," said Jiang Xizhou, director of the foreign economic commission of Huangpu District.

"The new Bund will be more fashionable and people-oriented," Jiang said.

Yesterday, Huangpu government officials met the Ermenegildo Zegna Group. The Italian company is likely to become a tenant at the Bund 18, which is under redecoration.

It is expected to open in September.

The neighboring Bund 3 is scheduled to open next month. The building will host the boutique of Giorgio Armani on the first floor, a gallery and several restaurants serving Chinese, French and Japanese cuisine.

The Bund 6, another redevelopment project, is due to open by the end of the year, also for retailers and restaurants.

With the unique historical location facing the Huangpu River, retail rents in the Bund area are likely to be the highest in the city.

Joanna Cui, senior manager of retail agency Colliers International Property Services (Shanghai) Co Ltd, said the daily rent on the Bund could be about US$3.50 a square meter.

"With all the new developments coming about by the end of the year, the Bund area will become more cosmopolitan and enjoy more credibility as the most upmarket area in Shanghai," she said.

Jiang said the Huangpu District is also reviewing the opportunity of transferring the Peace Hotel to Jardine Metheson Group.

Jardine set up its office in Shanghai in 1844 to handle trade.

"As the Bund used to house Jardine's local office, the area has special meaning for the group," Cui said.

Currently, the Peace Hotel is managed by Jinjiang International Holdings Ltd. If the transaction succeeds, it may be managed by Mandarin Oriental - a subsidiary of Jardine Metheson.