Hang Lung, Swire in mainland push
Developers plan to invest more than 7b yuan on shopping centres amid rising demand for retail outlets
Hong Kong-based developers Hang Lung Properties and Swire Properties unveiled more than seven billion yuan worth of investment on shopping centres in the mainland yesterday to tap rising demand for retail outlets.
Hang Lung said it would build a 150,000-square-metre shopping mall in Jinan, capital city of Shandong province, with an investment of about 2.5 billion yuan.
Swire Properties will team up with Hong Kong property fund Gateway Capital to buy a retail-hotel development in Sanlitun district in Beijing for 4.8 billion yuan. The South China Morning Post reported the deal last week.
Hang Lung said the mall would be located at the boardwalk street along Quancheng Road, a prime site known as 'Golden Avenue' in Jinan, that it bought in an auction for about 570 million yuan last Saturday.
The company plans to invest an additional of HK$1.93 billion to develop a six-storey world class shopping mall, to be named Jinan Hang Lung Plaza. The price represents about 3,800 yuan per square metre.
'The successful acquisition of this prime lot is part of our long-term investment plan in China,' Hang Lung said.
Hang Lung has previously indicated it may spend 30 billion yuan to build 10 to 12 malls in the mainland.
The company had bought five sites prior to the Jinan deal since 2005 to develop shopping malls in cities such as Tianjin, Shenyang, Changsha and Wuxi.
A Hang Lung spokeswoman said it would take about three years to complete construction of the mall.
Meanwhile, Swire Properties said it would take an 80 per cent stake in the retail portion of the Sanlitun project in Beijing with Gateway taking 20 per cent.
The property unit of Hong Kong-listed Swire Pacific also acquired the entire 100-room boutique hotel in the project.
'This innovative project in Sanlitun is our first investment in Beijing,' said Swire Properties chairman Keith Kerr.
Goodwin Gaw, chairman of Gateway, said Swire not only brought strong financial backing to the venture but also world-class management expertise.
'By having Swire Properties as our partner, we are confident that this will ensure our investment is well managed with long-term value creation in mind,' he said.
The Sanlitun project, which comprises two sites with a total area of more than 580,000 square feet, can be developed into gross floor area totalling more than 1.85 million square feet.
The development, which will be completed later this year, is a low-rise mixed commercial scheme that will offer more than 400 shops in 17 buildings and a boutique hotel.