The slowdown in the mainland's economy has not stopped CDG Retail, a retail-focused developer and asset manager, from building more shopping centres for the burgeoning middle class.
"This is the world's largest expansion of shopping malls ever," said founder and chief executive Timothy Daly. "I'm still a strong believer."
CDG, founded by Daly with other investors including United States private equity group Warburg Pincus and Red Star Macalline - one of the largest home improvement chain stores in China - is developing 12 projects totalling 1.2 million square metres across the country. And Daly said an additional 800,000 sq metres of developments are expected to begin next year.
Strong consumer demand fuelled by a rising middle class, ambitious expansion plans by international and domestic retailers, and a severe shortage of modern retail space are the key driving forces for CDG's blueprint for the mainland.
According to the Economist Intelligence Unit, retail sales in China are expected to account for 53 per cent of the total sales in the Asia-Pacific this year.
Sales in China topped 18.1 trillion yuan (HK$22.2 trillion) last year, up 17.1 per cent from 2010 and a more than fivefold increase from 2000.
Before forming CDG, Daly, who has 25 years' experience in retail development, was the general manager of a joint venture backed by US developer Simon Property Group, Morgan Stanley and Shenzhen International Trust & Investment.
By 2010, Daly had worked for Simon Property for 23 years before the company decided to exit from its Chinese assets. He decided to stay and took the core members of the team to form CDG.
"There may be some hiccups along the way," Daly said. "But China's long-term macroeconomic trend over a timeline of five to 10 years is really positive."
He said the retail development pipeline in China was huge, but not all the new shopping centres were of the right quality or location. He is confident of his projects and his team, believing they are making the right calls.
"We are focused on building the company, the pipeline and the projects," he said. "We have 1.2 million sq metres of lease, and I don't know where that ranks us in China. But it's a lot of space."
In 2004, when Simon Property landed in China, Daly was one of the trailblazing foreigners to develop high-end shopping centres in the country.
French-based retailer Auchan has signed strategic partnerships with CDG to open eight hypermarkets in the group's developments.
The group's shopping centres, now under construction at a total investment cost of about 8 billion yuan, are in 12 key second and third-tier cities including Wuhan, Kunming, Changzhou and Yantai.
Meanwhile, top domestic commercial property developers Dalian Wanda and Powerlong Real Estate Holdings are also stepping up their expansions, banking on the fast-growing consumer market.
Daly insisted CDG is a Chinese company, rather than a foreign entity.
"We are a Chinese company, a Chinese joint venture in fact," he said. "We believe and will continue to believe that the Chinese market would best understand our value."
He said CDG would consider a listing on the stock market when the timing was right.