Rebelling against Moganshan Lu, a group of younger artists moved into the century-old British style buildings at 696 Weihai Lu a couple of years ago, creating an incubator for multi media art. Notably, these buildings probably once served as opium storage facilities. Although the entire complex nearly became another architectural fatality recently when the government threatened to raze it to build skyscrapers, the fledgling community caught a break at the last minute and renewed their leases. Feet planted a bit more firmly in the concrete, 696 has sprouted a couple of low-profile galleries in addition to the 30-something artists who rent studio space there.
Source: Smart Shanghai
See also an article about the space.