Taubman Asia investing US$600m in new shopping centres
Shopping centres in mainland cities Xian and Zhengzhou to benefit from 40 per cent of budget
Taubman Asia, a subsidiary of US mall operator Taubman Centers, has committed US$600 million to projects in Asia, with 40 per cent of that investment earmarked for mainland ventures.
The company has formed a partnership with China's largest department store operator, Beijing Wangfujing Department Store, to invest a total of about US$230 million in two shopping centres in Xian, Shaanxi province, and Zhengzhou, Henan province.
Taubman is also investing US$350 million in a third joint venture, a 158,000 square metre shopping centre, Hanam Union Square, in Seoul, South Korea, due to open in 2016.
Co-investor South Korean department store operator Shinsegae owns the 293,905 square metre Centum City in Busan, which currently holds the Guinness World Record for the world's largest department store.
"When we decided to come to Asia, we looked at different countries where we would focus. We like China and South Korea for their long-term potential," Rene Tremblay, president of Taubman Asia, told the South China Morning Post.
He said the average gross domestic product in Xian and Zhengzhou was growing 40 to 50 per cent faster than some other mainland cities, and that the same was true for retail sales.
Mainland cities account for more than half of all shopping centre space under construction across the globe, according to a survey released in April by international consultancy CBRE covering 180 global cities.
Eight of the top 10 most active shopping centre development markets were in China, namely Chengdu, Tianjin, Shanghai, Chongqing, Shenzhen, Hangzhou, Beijing and Wuhan.
Undaunted by an oversupply of retail spaces in China, Tremblay still sees opportunities in some cities.
CityOn.Xian, Taubman's joint venture shopping centre in Xian, will have a gross floor area of 90,562 square metres and 2,200 parking spaces when completed in late 2015.
CityOn.Zhengzhou, the firm's 93,747 square metre mall in Zhengzhou, will comprise 200 retail tenants and is due to open in late 2015.