With superior location, design and management, shopping mall fears no e-commerce and is still appealing in mainland China
HONG KONG, CHINA, April 9, 2017 - Cushman & Wakefield, a global leader in commercial real estate services, assisted GAW Capital Partners and Morgan Stanley Real Estate Funds to successfully dispose Metropolitan Plaza, the landmark shopping mall in Western Guangzhou, to Link REIT, Asia's largest REIT. This is the first time that the three real estate tycoons have made a deal, which is the largest shopping mall transaction in South China in recent years.
Located in Liwan District and in the core of the traditional Xiguan CDB of Guangzhou, Metropolitan Plaza is the only mid to high-end shopping mall in the area. The four-floor mall directly connects Xiguan Huangsha station (the interchange between Line 1 and Line 6). It was built in 2006 by reputable Hong Kong developer Cheung Kong Property and Hutchison Whampoa Property, and opened in 2012, offering over 88,000 sqm GFA of retail space. In late 2013, Cushman & Wakefield disposed it to a consortium of GAW Capital Partners and Morgan Stanley Real Estate Funds.
During the past few years, the owner made the mall a dynamic mix of fashion and lifestyle stores, leisure and entertainment and a wide variety of F&B operators, enjoying nearly 100% occupancy rate of over 230 shops. By holding regular promotions and events, including celebrity meetings, exhibitions, sports and entertainment activities, Metropolitan Plaza became a new leisure and entertainment hub of Guangzhou-Foshan metropolitan region, enjoying footfall of 3 million monthly. Riding on the success, Cushman & Wakefield disposed the mall again at a time of scarcity of quality retail investment stock in South China.
China General Chamber of Commerce data shows that the revenue of 100 key large retailers in mainland China dropped by 0.5% in 2016. According to the Statistics Bureau of Guangzhou Municipality, Guangzhou realized total retail sales of RMB 870.65 billion. This growth rate of 9.0% is the highest among the four tier-1 cities in mainland China. The mature market and strong purchasing power of Guangzhou lays a solid foundation for the rapid development of Guangzhou retail property, thus making the city a popular choice for Hong Kong and oversea investors.
Alvin Yip, Managing Director, Co-Head of Investment & Advisory Services, China, commented: "It is true that e-commerce players are challenging brick-and-mortar retailers in mainland China. However, a good shopping mall offering unique, all-round experience is without a compeer. When we bought Metropolitan Plaza for GAW Capital Partners and Morgan Stanley Real Estate Funds in 2013, we saw its superior location and the broad prospect of high quality shopping malls as well. The owner further improved the tenant mix and upgraded the mall with innovative techniques. The disposal of Metropolitan Plaza is a typical deal of the retail property in mainland China, which shows such malls will be appealing to investors."
The Investment and Advisory Services team of Cushman & Wakefield is the only one of its kind in Hong Kong that focuses on Mainland China. From 2013 to 2017, the team closed 24 retail property deals with a total transaction of over RMB 40 billion in mainland China. In 2016 alone, the team concluded 23 real estate transactions and the transaction volume was RMB 39 billion.