Share
HONG KONG: Sun Hung Kai Properties is about to change the retail landscape of Shanghai's Pudong district by showcasing 25 world class brands in its soon-to-be-opened luxury shopping centre.
Retailers such as Louis Vuitton, Chanel, Hermes, Gucci, Prada, Cartier and Salvatore Ferragamo will start opening their flagship stores at Shanghai IFC Mall from Wednesday, said Maureen Fung Sau-yim, a general manager of Sun Hung Kai Properties' leasing department
Fung said nearly all the retail space in the 1 million square foot phase one at the shopping centre in Lujiazui had been leased. The international brands will take up the ground level of 161,400 sqft, with the remaining 155 tenants occupying the other five levels.
The leasing of the 100,000 sqft in phase two would be finalised next year, she said.
"It is a major breakthrough for Pudong, which has not seen any high-end retailers for the past 10 years," said Albert Lau, the managing director of property consultant Savills Shanghai.
Up to now Pudong has had only a Yaohan Department Store and the Super Brand Mall catering to the mass and middle markets.
However, since residential prices in Lujiazui, in the heart of Pudong, have risen to as much as 160,000 yuan (HK$181,900) per square metre, he believed there was a demand for high-end retailers.
"As luxury residential projects have been built along the Huangpu River in Lujiazui, the catchment area has changed dramatically from raw land 10 years ago," Lau said. "More importantly, the international brands' commitment to Pudong is a big thumbs-up for the area."
Fung said some of the international brands which were focused in Puxi were reluctant to extend their reach to Pudong when the firm approached them six years ago.
"But the rapid economic growth and infrastructure development in Pudong to host the World Expo has helped speed up the maturity of the luxury retail market," she said.
A Bain & Co report said the mainland's luxury goods market rose 12 per cent last year, reaching US$9.6 billion and accounting for 27.5 per cent of the global market.
It estimated that in the next five years the mainland would become the world's biggest luxury goods market with sales reaching US$14.6 billion.
With the Lujiazui metro station located in the basement of the IFC Mall, Fung said the trip from Puxi, the city's traditional core business district, would take only 15 minutes.
Of the 180 tenants that have committed to take space in the shopping centre, 15 per cent would be making their first appearance on the mainland, while 40 per cent would be opening their first store in Shanghai.
The IFC Mall is part of a development comprising 4 million square feet of grade A offices in two towers, a five-star 276-room Ritz-Carlton Hotel, and 260 serviced apartments. It is also SHKP's first wholly owned development on the mainland.
HSBC occupies 22 floors of the 45-storey Tower One. The Ritz-Carlton Hotel, due to open next month, occupies the top 15 floors of Tower One.
Fung refused to disclose the rents but said overall rents for prime luxury space were US$10 to US$15 per square metre per day in Shanghai.
Lee Hing-yin, a director of Colliers International's research and advisory department, said high-end retailers would not withdraw from Puxi, but Pudong would provide an alternative for international brands. -- South China Morning Post
