Taubman Asia, a subsidiary of Michigan-based Taubman Centers Inc. (NYSE:TCO) in the U.S., has announced a joint venture to invest in and manage a one-million-square-foot shopping center in Xi'an, China. Retail analysts speculate Taubman's investment will be in the hundred million dollar range.
The joint venture is between Taubman TCBL and Beijing Wangfujing Department Store (Group) Co., Ltd (Wangfujing), one of China's largest department store chains (Shanghai Stock Exchange: 600859).
The joint venture will have the majority ownership of the shopping center and will manager the property to be located at Xi'an Saigao City Plaza, a large-scale mixed-use development in Xi'an, China, which is developed by Shaanxi Fuli Real Estate Development Co. Ltd. The remaining ownership of the center will be held by Shaanxi Fuli Real Estate Development Co. Ltd.
In a press release, Taubman said this is the first retail development by Taubman TCBL in China since Taubman TCBL was formed in late 2011.
Rene Tremblay, president of Taubman Asia and chairman of Taubman TCBL, called the joint venture "a major milestone for Taubman TCBL. It is the company's first investment in the China market and we are proud to have formed a strategic partnership with Wangfujing, one of China's most respected department stores."
Liu Bing, President and CEO, Wangfujing, commented, "Wangfujing has already completed the initial phase of our company's development target and (we) are now dedicating our efforts to realizing our new strategic direction, and accelerating the development of the shopping mall industry."
She adds, "We are delighted to partner with Taubman on the Xi'an project. We believe that Taubman's profound industry experience will solidify the foundation of our partnership and help set new standards in China through their world-class shopping centers."
Thomas Tam, president and chief executive officer of Taubman TCBL, said his company is confident that "by combining Taubman's 62 years of shopping center development and management expertise, with Wangfujing's retailing experience and intimate knowledge of the Chinese consumer, we will create one of the most exciting retail destinations in China, that is well matched to the local market while in line with the best international standards."
Anchored by a Wangfujing department store, the seven-level Xi'an shopping center is expected to feature a cinema, restaurants, and about 300 international and local specialty stores.
It is scheduled to open in the third quarter of 2015 and is part of a 5.9 million square feet (gross building area) mixed-use project, which includes two hotels, a residential tower, two serviced apartment towers and an office building.
Beijing Wangfujing Department Store (Group) Co., Ltd is the largest retail group specializing in department store development in Mainland China. The group operates 25 department stores in 17 cities spanning five major economic zones in China. The company headquarters is in Beijing.
Shaanxi Fuli Real Estate Development Co. Ltd. is a property developer based in Shaanxi, China. Since 2002, he company has developed nearly 6.5 million square feet of mixed-use projects and landmarks under the name of SAIGAO.