Developers shop for mall space in Beijing
The capital has long been celebrated as China's hub of political, cultural and commercial activities, home to government buildings, office skyscrapers and historical monuments.
But now Beijing is gaining new fame as a shoppers' paradise, with numerous malls sprouting up across the city and more in the pipeline in the run-up to the Olympic Games.
"The number of malls will reach its peak by 2008, and the sector is entering a new period of development," said Dennis Luk, director of the retail department under Beijing Colliers International.
A 20-minute ride from the World Trade Center, the central business district's landmark building, is the recently opened 80,000-square-meter mall, The Place.
Beijing's swish set saunters through boutiques like Spanish brand Zara the company's first store in the city and rest their tired feet at the book store or the movie theater or Starbucks after a hard day's work of browsing designer items.
Adding to The Place's luster is a 250-meter-long and 30-meter-wide skyscreen, the biggest LED screen in the world, rumored to have cost some 250 million yuan.
Since Beijing's first modern shopping mall, the 120,000-square-meter Oriental Plaza Mall, was opened in Wangfujing about five years ago, it has been a veritable march of malls. Shopping malls in Beijing now cover a total floor area of 6.33 million square meters.
Last year alone, the sector added 953,000 square meters. More than 1 million square meters will be added this year, driven by projects including Solana, Xidan Mall Center Point and China Central Place.
"Developers are shifting attention from residential properties to commercial real estate, and the momentum will be sustained in the long run in a more reasonable and healthy way," said Luk.
The explosion of glittering new malls is actually a reflection of Beijing's rising income levels. In the last three years, the annual disposable income has risen by 15 percent while consumer product retail prices have gone up by 11 percent per annum, according to the Beijing Commercial Bureau.
Most overseas retailers are thus expanding in the city. Taiwan-based department chain store Shin Kong Mitsukoshi plans to make its first foray on the mainland this April with a store in China Central Place.
After its two stores proved to be a hit in Shanghai, Zara launched in Beijing with the Place this February and is said to be planning more. Its second store, in Solana, will open late this year.
"Developers are crazy about retail properties in Beijing, and the market is not going to be saturated for a decade, at least," said Zhao Jia, planning manager of Beijing Guohua Real Estate Co Ltd.
China Central Place, the 180,000-square-meter complex, is Guohua's first retail property. It targets high-end consumers with a collection of about 700 international brands and 90 top luxury lines, and will open next month.
"All booths have been rented three months before target," Zhao said.
Until the Oriental Plaza appeared in 2001, the shopping mall was an unknown concept to most Beijingers, who, however, immediately took to it with a vengeance. The result: malls enjoy high traffic and volumes and are seen as the best retail properties in operation.
This success story has spawned a booming retail property market, attracting domestic and international developers.
SOHO China, a leading local developer, has two malls SOHO Shangdu and Chaowai SOHO in Chaoyang District under construction that will begin operation this year. The third one, in Sanlitun, is on the drawing board.
CapitaLand Retail Limited, a Singapore-based developer, has two projects with a total floor area of 240,000 square meters.
Solana is Beijing Blue Harbor Properties Co Ltd's first retail property. "The prospects are fantastic and we'll keep investing in shopping malls in Beijing," said Xu Su, the company's vice marketing director.
(China Daily 03/20/2007 page15)
