Lifestyle to develop Shenyang site into store
Lifestyle International Holdings, operator of the Sogo department stores, is buying a site in Shenyang for 1.02 billion yuan and plans to develop it into a department store, according to a source.
Hong Kong-listed Lifestyle won the 56,000 square metre Shenhe district site in a public auction, the source said yesterday.
This is the company's second site purchase this month and the planned store will be the first such mainland project it plans to develop and finance on its own.
Earlier this month, Lifestyle said it aimed to take a 50 per cent stake in a proposed US$100 million shopping centre and office project in Suzhou that it would jointly develop with the local government.
Lifestyle owns a 65 per cent operating right and a 50 per cent equity stake in Jiuguang store in Shanghai. The company's partner in Shanghai is the local government.
The company will finance the Shenyang project through internal resources and bank borrowings.
The gross floor area of the Shenyang store, scheduled to open in 2009, will be about 310,000 square metres, similar to Shanghai Jiuguang.
The source said Lifestyle would pay about 18,300 yuan per square metre for the Shenyang site, lower than the 20,000 yuan per square metre, or 5.5 billion yuan, Hang Lung Properties spent in August for a nearby plot that will be developed into a shopping centre.
The Shenyang development is part of Lifestyle's plan to open three high-end shopping centres in the mainland over the next four or five years.
Lifestyle chief financial officer Terry Poon Fuk-chuen has said the firm is looking at sites in Beijing, Guangzhou and Hangzhou.
The Suzhou project would involve a shopping centre on a 53,192 square metre site and an office building on a 13,843 square metre plot, the firm said.
The company said it would finance the development through internal resources.
Mr Poon said the Suzhou project would open in the fourth quarter of 2008.
Shares of Lifestyle, which operates Sogo department stores in Causeway Bay and Tsim Sha Tsui, were suspended from trading yesterday pending the announcement.
