CapitaMalls Asia to acquire first shopping mall in Guangzhou, China

With expected S$534.1m total investment cost.

CapitaMalls Asia Limited announced that it is acquiring a new shopping mall in Guangzhou, China – its first in the city. The acquisition is subject to the approval of the Chinese government.

CapitaMalls Asia has signed an agreement to acquire a shopping mall at Baiyun Greenland Centre, an integrated development located at the junction of Yuncheng West Road and Qixin Road within the core commercial centre of Baiyun New Town in Baiyun District. Baiyun Greenland Centre also comprises a 200 metre-high office tower – the tallest landmark in the district.

CapitaMalls Asia said in a release that it is acquiring the shopping mall from Greenland Real Estate, a subsidiary of the Greenland Group, a leading state-owned enterprise based in Shanghai that also has investments in the energy and finance sectors. Greenland Real Estate is a leading Chinese developer which currently has projects in 80 cities in 26 provinces in China.

Baiyun District is the most populous district in Guangzhou with a population of over 2.2 million people. A number of companies are headquartered in Baiyun District, including China Southern Airlines and the Guangdong Airport Authority. These two organisations are currently building their new offices right next to the proposed mall in Baiyun New Town, which is positioned as the new regional centre of northern Guangzhou. Developed on the site of the former Guangzhou Baiyun Airport, the well-located Baiyun New Town is just 8 kilometres (km) from the central business district at Pearl River New Town and 23 km, or about half-an-hour’s drive, from Guangzhou Baiyun International Airport.

The mall will be connected to Baiyun Park subway station on Line 2 on its basement levels 1 and 2, making it the only shopping mall in Baiyun New Town that is directly connected to a subway station. Line 2 connects to the Guangzhou South High-Speed Railway Station, Guangzhou Railway Station and the provincial and city government offices. Line 2 is also linked to Line 3, which connects to the Guangzhou Baiyun International Airport just nine stops away from Baiyun Park subway station. Baiyun Park subway station is set to become an interchange for Line 2 and the upcoming Line 12, when the latter begins operation in 2020.

The eight-storey shopping mall (from Basement 2 to Level 6) will have a total gross floor area (GFA), excluding car park, of about 86,000 square metres (sq m). Shoppers will have access to approximately 1,620 car park spaces available at the integrated development’s car park.

CapitaMalls Asia said the proposed mall is positioned as a one-stop shopping destination, and will be anchored by a lifestyle supermarket and cineplex, and will house popular international and local fashion brands, as well as a wide range of food & beverage outlets. Targeted to open in phases from 2014, the mall will serve a population catchment of about 1.1 million people within a 3-km radius. Within a 5-km radius, its reach extends to about 5.7 million people.

On a completed basis, the total investment cost for the shopping mall is expected to be about RMB2,646.0 million (S$534.1 million / HK$3,340.7 million).

Mr Lim Beng Chee, CEO of CapitaMalls Asia, said, “As the capital of Guangdong Province, Guangzhou has the most developed economy in the Pearl River Delta. Its 2012 GDP was the third largest in China, after Shanghai and Beijing. At about RMB30,500 (S$6,157 / HK$38,508), its 2012 per capita consumer spending was the highest among the four first-tier Chinese cities, which also include Beijing, Shanghai and Shenzhen. From January to August 2013, Guangzhou’s retail sales grew 15.9% year-on-year, above the national average of 12.8%. With Guangzhou’s strong economic fundamentals, we are confident about the growth prospects of its retail sector.”

“Our proposed mall is located in Baiyun New Town, which is set to become the new regional centre of northern Guangzhou. It is also home to high-end residences, a new commercial centre, as well as conference, cultural and leisure facilities. When our mall is completed, it will cater to the middle and upper-middle income residents and professionals living and working in Baiyun New Town and the larger Baiyun District. The new mall will be a one-stop shopping destination that meets the lifestyle needs and aspirations of the community, as well as offers quality space for retailers keen to expand in this first-tier Chinese city with good growth prospects.”

“This new mall in Guangzhou will mark our strategic entry into a first-tier city in South China. It will bring the number of our malls in the region to eight, of which four, – including the new mall – are located within or about an hour’s drive from one another. We will leverage on our established team in South China, which has been in Guangdong Province since 2005, to manage the new mall. This acquisition is part of our growth strategy to selectively expand our footprint in China, while strengthening our presence in the cities and regions we are already in.”

Including this development, CapitaMalls Asia now has 62 shopping malls in 37 cities in China, of which 51 are operational while the other 11 are under development.