Germany’s Metro Group keen on adding self-built stores in China despite surging land costs

As one of the first global retailers to enter China in the 1990s when the country partially opened its retail market, Germany-based Metro Group has taken a different path to develop its self-built stores and has owned a large number of properties since then.

Geoffrey Guo, expansion director and head of project development of China at Metro Jinjiang Cash & Carry, a joint venture set up with Shanghai-based Jinjiang Group, said at the time there was no way to find properties that can meet their requirements, as they need floor heights of 13 metres and floors capable of handling loads of 2.5 tonnes.

Although the company has lowered its requirements in recent years when renting stores partly because of the pace of growth of land prices in China, Guo, a Singaporean with rich experience in real estate who has lived in Shanghai since 2003, said the company will definitely not go completely asset-light and maintain its advantage in having its own stores.

He said Metro will continue to look for reasonably priced land and will fight to open more self-built stores as the company believes that by owning its own stores it can provide customers with the best service.

How does Metro buy land in China?

We have bid on land through the open market since 2005, usually by ourselves.