Taubman invests in new shopping centres in Asia

Taubman Asia, a subsidiary of US mall operator Taubman Centers, has committed US$600 million to build new shopping malls in Asia, with 40% of the investment budget earmarked for China projects.

Taubman has formed a partnership with China’s largest department store operator, Beijing Wangfujing Department Store, to invest a total of about US$230 million in two shopping centres in Xian, Shaanxi province, and Zhengzhou, Henan province.

The company is also investing US$350 million in a third joint venture, a 158,000sqm shopping centre, Hanam Union Square, in Seoul, South Korea. This is due to open in 2016. Its co-investor in the project is South Korean department store operator Shinsegae.

“When we decided to come to Asia, we looked at different countries where we would focus. We like China and South Korea for their long-term potential,” Rene Tremblay, president of Taubman Asia, told South China Morning Post in an interview.

Tremblay said the average gross domestic product in Xian and Zhengzhou is growing 40-50% faster than some other mainland cities, and that the same was true for retail sales.

According to a survey released in April by international consultancy CBRE covering 180 cities, mainland cities account for more than half of all shopping centre space under construction across the globe.

Eight of the top 10 most active shopping centre development markets are in China, namely Chengdu, Tianjin, Shanghai, Chongqing, Shenzhen, Hangzhou, Beijing and Wuhan.

However, Tremblay is undaunted by the oversupply of retail spaces in China. He said he still sees opportunities in some cities.

CityOn.Xian, Taubman’s joint venture shopping centre in Xian, will have a gross floor area of 90,562sqm and 2,200 parking spaces. CityOn.Zhengzhou, Taubman’s 93,747sqm mall in Zhengzhou, will comprise 200 retail tenants. Both will open next year.