Cofco sees joy in growing mall rentals from Chinese cities
Cofco Land, a state-backed mainland commercial property developer, opened its sixth Joy City complex yesterday, as part of the company's strategy to eventually generate half of its revenues from rental income, up from less than 10 per cent now.
The developer planned to operate 20 such projects within five years and was seeking opportunities in other cities including Shenzhen and Hangzhou, senior executives said.
"We plan to quickly replicate Joy City projects in prime locations of China's first and second-tier cities as well as some third-tier coastal cities," said company chairman Zhou Zheng.
The newly opened project in Yantai, Shandong province, is 49 per cent owned by GIC, an investment arm of the Singapore government.
Cofco owns the controlling stake of 51 per cent.
Cofco Land has a call option to acquire all six Joy City projects from its parent firm, with such an arrangement still under discussion, Zhou told reporters without giving a timetable.
The other projects include two in Beijing and one each in Shanghai, Tianjin and Shenyang in Liaoning province. Currently, they are not included in the financial results of Cofco Land.
The opening yesterday caused rare traffic jams in Yantai, a city with GDP per capita of about 80,000 yuan (HK$100,000) last year, with the event attracting tens of thousands of visitors.
About 85 per cent of the seven-storey, 220,000-square-metre complex was open for business on the first day. The shopping mall houses 150 global and domestic brands that are new to the coastal city, such as H&M, Zara and Gap. It also offers the city's first Imax cinema.