In 2005, 18 creative parks opened in Shanghai.

In addition to M50, there are others along the Suzhou Creek, Tian Zi Fang on Taikang Road, Red Town on Huaihai Road W., 1933 Old Millfun in Hongkou District and Bridge 8 on Jianguo Road M.

"Creative industry is a name card for Shanghai," says He of the Shanghai Creative Industry Center. "They seemed to become popular overnight, but problems arise when too many competitors are striving in the same field and economic conditions are not ideal. That's especially so in the arts that are influenced by the global financial crisis."

Highstreet Loft on Jianguo Road W., near Jiashan Road, in Xuhui District opened in December 2008.

It's the site of the Shanghai Textile Group's Shanghai No. 9 Knitting Factory that produced underwear for the famed Three Guns brand.

It took a year to plan and another year for reconstruction. "The idea was to establish a SOHO in Shanghai's center by using the powerful background of our textile group and attracting fashion labels," says Ma Ni, vice general manager of Shanghai Highstreet Loft Investment Co.

Culture, history and location are important factors when investors consider possible sites. The oldest structure in Highstreet Loft was built in the 1920s.

"The arts atmosphere is hard to copy," says Ma.

In early 2007, the occupancy rate of creative industry parks was over 90 percent, but it dropped to 80 percent in one year, according to He.

Many fashion shops and design studios left when they found the location unsuitable.

"Customer flow is vital to fashion stores that depend on sales, but Highstreet Loft can't provide so much," says Ma.