Investors snapped up a shopping mall in Beijing for 6 billion yuan (HK$6.99 billion), reflecting strong demand for retail property and setting a new record for commercial real estate in the capital.
Le Mall, developed by local company Huaxilemao, had been sold to Changchun-based Hong Kong Charter Group, a spokeswoman for Hong Kong Charter said yesterday. 'Our businesses used to focus in the three northeastern provinces [Heilongjiang, Jilin and Liaoning],' she said. 'Le Mall is our first project in Beijing.'
The previous record price for retail property in Beijing was Swire Properties' partnership with property fund Gateway Capital to buy a retail-hotel project in Sanlitun district for 4.8 billion yuan in 2007. The project has a retail floor area of 115,000 square metres and a hotel floor area of about 56,000 sqmetres.
Although the project is in a better location, its development scale is 40.7 per cent smaller than that of Le Mall.
'Le Mall, located in Haidan district, west of Beijing, is one of the largest shopping malls in the capital ... There is no [other high-end] development in the area,' a retail agency in Beijing said. 'The buyer is well known in developing luxury shopping malls in the three northeastern provinces. It has developed three shopping malls in Changchun, Shenyang and Harbin. It also has strong connections with global luxury brands. That's why it is willing to pay such a big amount for the mall.'
Le Mall is a seven-storey retail and office complex with a total gross floor area of 290,000 sqmetres. Tenants include the Jackie Chan Cinema, Pacific Department Store and luxury brand Burberry. Property agents estimate the mall can offer a gross rental yield of about 10 per cent. Gross yields in Hong Kong are 5 to 6 per cent. Alvin Yip, of property consultancy DTZ, said the sale was not a sign of a property bubble, citing strong demand.