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Category: Real Estate

Retail News Asia is committed to providing both local and global retailers with the latest Real Estate news throughout the Asian market. This on a daily base.

  • Hysan Place sales soar 22%

    Hysan Place sales soar 22%

    Causeway Bay retail landlord Hysan Development says its core net profit rose 5.9 per cent last year to HK$2.16 billion.

    Turnover rose 5.3 per cent to HK$3.22 billion but the company’s net profit fell 20.4 per cent to HK$4.9 billion due to a smaller ‘fair value gain’ on its investment property valuations.

    The company is now exploring investment opportunities both within Hong Kong and offshore.

    “With a strong balance sheet and proven financial discipline, Hysan is now well-positioned to seek opportunities beyond our core portfolio in Causeway Bay,” said chairman Irene Lee Yun-lien.

    Hysan, which owns Hysan Place and Lee Gardens, said retail sales within its property portfolio increased 22 per cent year-on-year – against a 0.2 per cent fall in Hong Kong’s overall retail market. A major contributor to that was the opening of an Apple store in Hysan Place.

    Deputy chairman and CEO Lau Siu-chuen said the company was unconcerned about possible tightening of mainland travellers access into Hong Kong.

    He said Causeway Bay is far from the Shenzhen border and the centres have not been a popular destination for Chinese using multiple-entry permits.

     

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  • Chengdu IFS mall excels

    Chengdu IFS mall excels

    The 206,000sqm Chengdu IFS mall which opened last year is trading 21 per cent ahead of budget.

    The mall’s success helped drive Hong Kong-based parent The Wharf Holdings’ Chinese revenues by 57 per cent to HK$1.984 billion in 2014. Operating profit in the market rose 30 per cent to HK$991 million.

    Located on the prime intersection of Hongxing Rd, Dacisi Rd and Beishamao St, Chengdu’s busiest pedestrian shopping area, the IFS (International Finance Square) mall is modelled on The Wharf’s Harbour City mall in Hong Kong.

    The total development area of 760,000 sqm features a mega shopping mall designed by Benoy, two premium-grade A office towers designed by Kohn Pederson Fox Associates, a luxurious residential tower and a premium hotel. The mall and the office towers were completed in 2014 and the full development will be completed this year.

    “Since its opening in early 2014, the mega mall has become a one-stop lifestyle shopping landmark in Western China, thanks to its unparalleled location, critical mass, world-class management and services,” said The Wharf in its 2014 profit announcement.

    “Its most comprehensive trade mix, lifestyle and entertainment offering fuels strong demand from the rising middle class. The presence of nearly 300 of the world’s most coveted brands (including over 100 debut stores of renowned brands in Western China) underlined retailers’ confidence in Wharf’s management expertise. With its 530 metre retail street frontage on par with Harbour City’s Canton Rd frontage, Chengdu IFS is comparable to Harbour City in terms of showcase effect and attraction power.”

    The mall is over 99 per cent leased, with 98 per cent of shops already trading. Since its opening, retail sales jumped 400 per cent and foot traffic by 250 per cent at year-end.

    The mall generated a revenue of RMB483 million in 2014, 21 per cent above target, and is expected to reap an annual retail revenue of RMB600 million at full operation.

    Further China success

    The Wharf’s other properties also enjoyed improved fortunes in 2014.

    Shanghai Times Square, located on Huaihai Rd, has been transformed into a high-end retail destination with the largest Lane Crawford store in China and a mega lifestyle specialty store City’Super, upon completion of its substantial renovation in 2013. The renewed mall alongside the new cluster on HuaiHai Rd and the new Lane Crawford complements one another and creates value. Shanghai Times Square was over 99 per cent occupied at year-end after the tenant mix was further refined with the addition of new brands, culinary and lifestyle tenants.

    The Wharf group is developing five IFSs in China, with a scale comparable to or surpassing that of Harbour City and Times Square in Hong Kong. These IFSs, upon full completion by 2017, will significantly enhance the group’s recurring income base in China and be a significant growth driver.

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  • SF aims to revolutionise community mall business in Thailand

    SF aims to revolutionise community mall business in Thailand

    Siam Future Development Plc (SF), a SET-listed community mall developer, will resume its expansion by allocating 1.5 billion baht to develop up to three new community malls in the next three years.

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  • Lotte.com opens Tmall storefront

    Lotte.com opens Tmall storefront

    Korean retailer Lotte Mart has opened a shop front on China’s Tmall.

    The Lotte Mart store on Tmall Global, is the first Korean discount store to have an online presence on the popular Chinese online shopping mall.

    Lotte Mart has launched with an offer of 16 selected Korean products popular with Chinese customers, including beauty products such as shampoo and bathing goods, ginseng and Tongkeun Oxford blocks.

    The range will be expanded to between 100 and 120 products by the end of March.

    Lotte.com will manage the Tmall site operations and marketing while Lotte Mart will manage product sourcing.

    Tmall Global Mobile Lotte Mart page 315

    Lotte Mart will monitor sales to Chinese tourists in its offline department stores and duty free outlets to guide product selection for the new Tmall store.

    Lotte.com opened a Global Lotte.com site in February 2014, serving overseas purchasers. Chinese shoppers account for 75 per cent of the Global Lotte.com sales, despite the site serving 19 international markets. Sales to Chinese shoppers are increasing by an average of 40 per cent each month this year.

    Lotte.com says Chinese shoppers trust the quality of Korean products with the most popular categories Korean cosmetics and baby products such as diapers and wet tissues.

    Tmall is a business to consumer online store managed by Alibaba, China’s largest eCommerce group. Tmall Global specialises in foreign brands and foreign companies targeting Chinese residents.

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  • Walmart China to add 30 stores

    Walmart China to add 30 stores

    Walmart China plans to open 30 new stores in China this year, according to media reports from China.

    In addition to the store openings, the US-based retail giant says it will invest US$59.11 million in upgrading about 50 existing stores to modernise them.

    According to a report in the Shenzhen Daily newspaper, five or six of the new hypermarkets will be located in the Guangdong province and two will open in undisclosed locations in Shenzhen. The company already has about 80 stores in Guangdong and four distribution centres.

    Walmart has struggled to gain traction in China despite its enormous buying power and the importance of the nation as a product source for its global store network.

    But it has still managed to build a 400-store strong network, despite intense competition from local rivals.

    The Shenzhen Daily said Walmart China had increased both its sales and profit last year.

    It reported the Sam’s Club in Shenzhen’s Futian District is the top-selling Walmart store worldwide.

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  • Vivo City Shanghai signs cinema anchor

    Vivo City Shanghai signs cinema anchor

    Vivo City Shanghai developer Mapletree Group has signed up a cinema chain as a key anchor of the development, currently under construction.

    A 15 year lease has been signed by Pegasus Entertainment Holdings for a two-story cinema complex taking up the top two floors of Vivo City Singapore, which will be branded Cinema City.

    Vivo City is being built in the CBD district of Minxing in Shanghai, with the Singapore-based developer expecting construction to be complete by the first quarter of 2016.

    Vivo City is planned to be a new landmark in Southwest Shanghai with a GFA of 120,000 sqm, featuring over 280 shops and over 2600 parking spaces. It is located next to seven office towers and above two metro lines with excellent connectivity to the Hongqiao airport and nearby five densely populated residential communities.

    Pegasus’ directors said they believe such a large scale development will bring “a vibrant and diversified customer stream” and attract a majority of the district’s foot traffic to the mall which will directly benefit the cinema business.

    Pegasus says it plans to replicate the success of its flagship cinema in Hong Kong – Cinema City Langham Place – in mainland China. Cinema City Shanghai will feature “the most advanced projection and sound systems”, including the exclusive viewing technology 4DX originated from South Korea, to bring “a new and unprecedented film viewing experience to PRC top-tier cities”.

    The Vivo City cinema complex will feature at least nine screens with some 1400 seats.

    Cinema City Langham Place, which officially opened in early January this year after renovation, is ranked first in terms of box office income among all cinemas in Hong Kong, according to statistics from Hong Kong Box Office System.

    “Given the high-end cinema business model under the brand Cinema City has been proven successful, this will be a stamp of approval for the group’s development strategy and growth potential in the film exhibition business going forward,” said Pegasus in a statement.

  • Lend Lease to partner in $2bn Malaysia project

    Lend Lease to partner in $2bn Malaysia project

    Australia’s Lend Lease has signed up to develop a new retail and residential development in Malaysia.

    Lend Lease will have a 60 per cent stake in The Lifestyle Quarter with local developer 1MDB Real Estate the balance.

    1MDB is the master developer for an upcoming international financial district called Tun Razak Exchange. The Lifestyle Quarter will be a retail‐led, mixed‐use development of over 17 acres comprising a new retail mall, several residential towers and a hotel connected to a multilayer central park and the largest MRT station in Kuala Lumpur. When completed it will have a Gross Development Value estimated at MYR 8 billion (US$2.156 billion).

    The two companies signed a Master Framework Agreement last October, and late last week signed a formal JV agreement in the presence of Malaysia’s Prime Minister Dato’ Sri Mohd Najib Tun Abdul Razak.

    Lend Lease Asia CEO Rod Leaver, said the two companies will transform TRX into “an iconic destination”.

    “With our global track record in large scale urban regeneration in partnership with national and city governments, coupled with  our over 35 year history in Malaysia, we are confident of making the TRX Lifestyle Quarter an outstanding success with our partner.”

    TRX aims to become a global hub for international finance and business.

    Lend Lease has a growing portfolio of property interests in Malaysia, the most recent being Setia City Mall.

    The company was selected from a pool of international and local bidders to partner with 1MDB RE in the Lifestyle Quarter development following an invitation to participate as a strategic development partner.

    The Lifestyle Quarter will form the social heart of the TRX precinct. It aims to offer a series of modern lifestyle experiences and set new benchmarks not only in terms of design, but for the types of retailers, dining establishments, outdoor spaces, leisure activities and entertainment options it provides.

    TRX will be one of the largest developments in Lend Lease’s current portfolio of global projects.

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  • New buyer emerges for troubled BHS

    New buyer emerges for troubled BHS

    A former executive of troubled British retailer BHS has emerged as a surprise potential buyer of the business from Sir Philip Green’s Arcadia Group.

    BHS is the only non-performing unit of Arcadia, its widening losses undermining the results from better known chains Topshop, Miss Selfridge, and Dorothy Perkins. Sir Philip announced in January he was looking at selling after receiving several approaches for the business.

    One of those was identified as South African-based Pepkor but that company is believed to have withdrawn from discussions.

    According to a report in The Telegraph, a new bid has been prepared by Tony Brown, a former retail director at BHS, who is working with a private equity fund Alteri Investors, in turn backed by Wall Street fund Apollo.

    Alteri was launched in late 2014 to specialise in turning around struggling retail business, by Gavin George, who specialising in revamping or winding down failing retailers.

    The Telegraph said it understood talks had been ongoing with Alteri and Brown “for some time”, although a deal is likely to still take several weeks and could yet fall apart over price.

    BHS has 180 stores and about 12,000 staff.

    Last year, Arcadia Group said BHS cash losses rose from £19 million to £21 million in the year to August 30.

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  • CapitaMalls confirms Tropicana purchase

    CapitaMalls confirms Tropicana purchase

    CapitaMalls has completed due diligence in its bid for Tropicana City Mall and Office Tower in Selangor, Malaysia.

    CapitaMalls will pay RM540 million (US$146.4 million) for the complex through its Malaysian subsidiary CapitaMalls Malaysia Trust (CMMT). Settlement is likely to be completed by July 1.

    CapitaMalls says the property’s Net Property Income is RM33.00 million, which has been derived by annualising the Property’s NPI forecast of RM16.50 million for the six month period to December 31, 2015 (assuming that the Proposed Acquisition is completed on 1 July 2015). This translates into a property yield of about 6.1 per cent.

    The four level Tropicana City Mall opened in 2008 and has a net lettable area of 448,248 sqft and 1759 car park. It is attached to a 12-storey office building.

    As of January 15, the mall had an occupancy rate of 89.2 per cent and the office tower was fully leased. CapitaMalls had previously considered buying the mall in mid 2013, but the negotiations ended after both parties were unable to agree to purchase terms.

    “The proposed acquisition will further strengthen CMMT’s position as a sizeable, well geographically diversified shopping mall real estate investment trust in Malaysia,” CMMT said in an earlier statement.

     

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  • Lotte Vietnam boosts investment

    Lotte Vietnam boosts investment

    South Korea’s Lotte has acquired a majority share in a Ho Chi Minh City shopping centre, office and apartment complex as it protects its Vietnam beachhead.

    Lotte Vietnam has bought out another Korean business’ 70 per cent stake in Diamond Plaza, a high profile 20-story tower housing a multi-level department store, foodcourt and other retail facilities, along with offices, a medical centre, cinema and apartments.

    It was one of the first modern era shopping developments in the country’s largest city, although its footprint is dwarfed by more recent developments such as Vincom and Union Square, also in the CBD, and Crescent Mall in the Asian-expatriate hub of District 7.

    Lotte already has extensive investments, and reach, in Vietnam, operating Lotte Mart hypermarkets, cinemas, a hotel on the Saigon riverfront and a chain of Lotteria fast food outlets which was well established before US rival McDonald’s debuted in Vietnam in late 2013.

    Diamond Plaza was opened in August 2000, then valued at US$60 million. It was a joint venture between local developer Construction Corporation No.1 and Korean steel company Posec, a subsidiary of steel maker Posco. Lotte has bought out Posec’s interest for an undisclosed amount.

    In another transaction not officially released, Lotte has purchased two Pico Plaza branded shopping centres in Hanoi and Ho Chi Minh City and rebranded them Lotte after converting supermarkets into Lotte Mart hypermarkets.

  • Scotts Square Singapore mall ‘exodus’

    Scotts Square Singapore mall ‘exodus’

    Just three years after its opening, questions are being asked about the business model of Wheelock Properties’ luxury Scotts Square Singapore shopping centre.

    The compact but glitzy mall opened in 2012 on the site of the demolished Scotts Shopping Centre. It sits off Orchard Rd, between Tangs department store and the Grand Hyatt five-star hotel.

    This week, at least 10 tenancies were vacant, leaving 28 open in the 75,000sqft mall, according to a report in the Straits Times newspaper.

    Luxury watch store Sincere Fine Watches has moved out of its street-front space on the first and second floor, joining Ginza Sushi Ichi and Arossa Wine & Grill, which shut their doors on Jan 31. Apparel chain Bread & Butter and Malaysian cafe Delicious had already moved out. Anne Fontaine, Kiton and Marina Rinaldi will move out this month in what the newspaper described as “an exodus”.

    Wheelock Properties group GM of marketing Stephanie Tay, was trying to put a positive spin on the move, saying some current tenants were due to renew or complete their leasing term. “This gives us the opportunity to tweak our tenant mix and refresh our offerings,” she told the Straits Times.

    However her employer had already publicly conceded the centre was failing to perform. Late last month, Wheelock Properties announced it had written down the book value of the mall by 17 per cent to reflect “poor business conditions” – from S$312 million to $260 million.

    “Scotts Square is operating under very challenging circumstances as a boutique mall,” the listed company said in a stock exchange announcement. “A substantial tenant and trade mix revamp is underway for the mall and reduction of rental revenue is expected for the initial years,” it said.

    The company maintained that at the end of December – before the trickle of exits became an exodus – Scotts Square had an overall occupancy rate of 88 per cent and an average monthly rental of S$16 per square foot.

    The Straits Times quoted a sales assistant at fashion brand Paul & Shark describing the mall as “quite empty”.

    “We get maybe 20 walk-ins a day, but we can sell to about five.”

    Scotts Square Singapore comprises three levels of retailing and a FairPrice Finest supermarket in the basement, largely serving the residents of the 43 storey apartment tower above it.

    The mall’s undoing would appear to be the market positioning of its offer. With neighbouring shopping centres catering for mid-range shoppers – and the largest on Scott Rd best described as an entry level destination – there simply isn’t the foot traffic for a mall with lesser known luxury brand tenants.

    The survivors – for now – include US fashion brand Michael Kors, shoe chain On Pedder and Wild Honey, a restaurant.

  • New northeast Bangkok mall

    New northeast Bangkok mall

    Thailand’s The Mall Group has budgeted US$91 million to build a new shopping centre in Bangkok’s northeastern outskirts.

    A final decision on the new Bangkok mall will be made within weeks, and represents an additional capital commitment beyond the $2 billion investment in the Emporium, EmQuartier and EmSphere developments in Bangkok and new malls in Phuket, previously announced.

    The new mall would be built on land across the road from Fashion Island on Ram Intra Rd, a key Bangkok arterial route.

    CEO Paiboon Kanokwattanawan told the Bangkok Post newspaper that having a shopping mall in the Ram Intra area “will fulfil our goal to serve customers in all important areas of Bangkok”.

    The Bangkok focus is aimed at cashing in on the establishment of the AEC later this year, of which Bangkok will be the capital.

    Paiboon told the Bangkok Post his company will not be following rival Central Group’s strategy of establishing centres in border towns.

    “We never planned to open our retail projects in special economic zones or border towns because Bangkok will be the capital of the AEC. It’s not necessary for us to develop projects in other locations as Bangkok is bigger than we thought.”

    He said people travelling from AEC member countries like Vietnam or Laos to Malaysia or Myanmar had to transit in Bangkok and while there “they will go shopping”.

    According to a report from Colliers International (Thailand) some 30 new shopping centres are scheduled to open in Bangkok and its suburbs during 2015 and 2016, adding about 1.52 million sqm of retail space to the Thai capital.

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  • Foreign brands drive Manila malls boom

    Foreign brands drive Manila malls boom

    Manila’s thriving retail sector will lead boost returns for shopping centre developers, says new research from real estate specialist CBRE.

    “With several new malls operational this quarter, supply of retail space has boosted,” concludes CBRE’s The Philippine Real Estate Industry Update and 2015 Outlook.

    “Retail sales remained solid, demonstrating upticks in consumer spending as evidenced by the low inflation rate and an encouraging outlook for real estate and tourism sectors.”

    Nationwide, the Philippines’ retail industry growth is being fuelled by both local and international brands expanding their footprints.

    “The quarter saw the entry and expansion of new and existing global brands in different retail core sites. These international brands have recognised the potential of the Philippine retail market, signified by the country’s strong economic growth.”

    Sweden’s H&M is a prime example: after a successful debut in Manila, the company has aggressively expanded its operations throughout Metro Manila with local major shopping mall operators. The first H&M outlet in Megamall occupies 3000 sqm over three floors and is now considered one of the largest retail stores in the Philippines.

    Estancia Mall in Capitol Commons, which houses several retail outlets and restaurants, opened in the fourth quarter in time for the holiday rush. The building, which has a gross floor area of over 30,000 sqm meters, also incorporates office space.

    Other Manila malls opening during the quarter were Robinson’s Place Las Piñas and City of Dreams Manila.

    “With the holiday season at hand, the retail sector remained active with more international retailers showing interest in entering the domestic market. Consumer sentiment was sustained as major drivers such as the BPO sector and overseas remittances show no signs of slowing down,” said CBRE.

    Diversifying into the retail segment, major developers are taking advantage of the ‘Retail- tainment’ concept wherein office and residential projects are including retail use.

    “The purpose of this is to provide the overall retail experience to Filipino shoppers, giving them the power of choice at their own convenience. This factor is also seen to attract foreign retail players to dive into the Philippine market scene.”

    These factors, says CBRE, will drive “upbeat” demand for, and supply of, retail space in Manila malls in the near future.

    “Overall, the Metro Manila retail market is seen to remain strong and stable for the remainder of the year empowered by the expanding Business Process Outsourcing industry, Overseas Foreign Worker remittances, growing tourism and a growing middle-income market.”

  • Mall Group attracts major names

    Mall Group attracts major names

    Tiffany & Co heads a list of major international brands confirmed as tenants of The Mall Group’s massive new development in the heart of Bangkok.

    The Mall Group is creating The EM District on Sukhumvit Rd, comprising three projects –  The Emporium, The EmQuartier and The EmSphere. The Emporium is under refurbishment and the other two properties are new.

    When complete, the three properties will comprise a total retail space of 650,000 sqm and represent an investment of US$618 million.

    The EM District will be home to more than 1000 Thai and international brands, luxury fashion labels, technology, lifestyle, living and dining facilities.

    The Mall Group this week revealed that jeweller Tiffany & Co will be making its Thai debut in the complex, along with fellow New York-based retailer Van Cleef & Arpels, French brands Haute Joailler, Roger Vivier, a high-end Parisian footwear label, and footwear brand Charlotte Olympia footwear.

    Saint Laurent will open a concept store offering lifestyle items, Tory Burch will open its first full concept boutique, Germany’s MCM promises a flagship of its bags and Sephora will open its largest Thai flagship.

    Other international brands confirmed for the project are Banana Republic, A Bathing Ape, Zara, Massimo Dutti, H&M, Uniqlo, Gap, MNG, Super Dry, Beams, Stylenanda and Uncensored. They’ll join local brands including Fly Now, Greyhound, Soda, Something Boudoir, Senada, Asava, Kloset, Sretsis, Issue, It’s Happened, Disaya, Sanshai, Tube Gallery and Vickteerut.

    Luxury brands already confirmed include Louis Vuitton, Chanel, Dior, Prada, Cartier, Dolce & Gabbana, Celine, Fendi, Gucci, Tod’s, Valentino, Chloe, Loewe, Miu Miu, Salvatore Ferragamo, Balenciaga, Ermenegildo Zegna, Jimmy Choo, Burberry, Emporio Armani, Hugo Boss, Dunhill, Issey Miyake and Club 21.

    The Emporium and The EmQuartier Gourmet Market, under a new concept of high-end and modern gourmet market, will provide food and delicatessens from around the world. The EM District will also incorporate a world-class entertainment complex including Quartier Cineart by cinema operator Major Cineplex Group, with seven and an Imax.

    Rival cinema group SF Cinema City will open Emprive Cineclub billed as “a completely renovated six-star theatre”.

    The EM District will be home to more than 10 venues and halls, including The Quartier Hall, Parc Quartier, Quartier Avenue and Emporium Gallery, ranging from 200 to 2000 sqm, available to host exhibitions, fashion events, music and art festivals and product launches.

    Food is another key element. The EM District will feature a broad range of international and local food brands, including Dean & Deluca, Harrods, Cova and TWG. Jones the Grocer, a gourmet food store originating in Australia, will make its debut. along with Pierre Herme French macaroon boutique that directly imports every macaroon from France.

  • New Myer team to embark on transformation

    New Myer team to embark on transformation

    Myer shareholders are bracing for a sharp fall in earnings and big asset write-downs and provisions over the next few years as the new management team embarks on a multi-year transformation plan to reshape the 115-year-old department store chain.

    Analysts and investors believe the new team, led by former Woolworths and Australia Post executive Richard Umbers, needs to spend at least AUD150 million (USD117m) over the next three years, on top of underlying spending of AUD30 million a year, to reverse the effects of years of underinvestment in e-commerce, IT, service and stores.

    Myer’s earnings could fall by as much as 12 percent in 2016 because the investment will precede any significant rebound in sales, squeezing margins.

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