JAPANESE retailing giant Jusco has signed a deal to become an anchor tenant of a shopping mall in a massive property developed by a consortium led by Kerry Holdings. It will take a 32.5 per cent stake in a retail joint venture, Shanghai Jusco, which will own and operate the department store when it opens late next year in Kerry Everbright City, a US$600 million office, residential and commercial complex in Zhabei. Other retail venture partners are Kerry Department Store, which also has a 32.5 per cent interest; Mitsubishi, a five per cent stake; and Shanghai Surpass Industrial and Surpass Commercial, which will hold the remaining 30 per cent. Yesterday, the partners signed an agreement to lease 139,900 square feet, witnessed by Kerry Group chairman Robert Kuok, who is chairman of South China Morning Post (Holdings), and Shanghai vice-mayor Xia Keqiang. A topping-out ceremony for the shopping mall was held. Jusco will be the third major Japanese retailer to set up in Shanghai. Isetan runs a store on Huaihai Zhong Road, while Yaohan is establishing one of Asia's largest stores in Pudong with Shanghai Number One Department Store. 'China is developing so fast and Shanghai is a major city - so, we have to be here,' said Eiji Akiyama, Jusco's executive vice-chairman. The retailer is setting up joint-venture department stores in Guangzhou and Qingdao. Tetsuji Noshio, Shanghai Jusco's general manager, was optimistic that despite fierce competition in the retail industry, the department store would become profitable 'in a short time'. He declined to elaborate, but said Shanghai Jusco's turnover in the first year was estimated at 400 million yuan (about HK$371 million). 'Unlike many foreign retailers who sell up-market goods, we are aiming at the middle-income Shanghainese. That's where the spending power is,' Mr Noshio said. Mr Akiyama said the group decided to operate a store in Zhabei because the municipal government had designated it for redevelopment into a new city centre, known as Everbright City. Kerry Everbright City - the largest property complex there - will be the heart of the city centre. The complex will have nine buildings - two office towers, two commercial and residential towers, three apartment blocks, a multi-purpose commercial tower and a business hotel with gross floor space of about 5.62 million square feet. It is being developed in three phases by Shanghai Gang Hu Properties - a joint venture of Kerry Holdings, China Everbright, Cheung Kong, CVIC, Top Glory and Shanghai Yingdu Real Estate. Kerry Holdings, with a 45 per cent stake, is the largest shareholder.