Chongbang to Invest $400M in Phase 2 of Shanghai’s Lifehub@Anting

Chongbang Group has closed the $120 million acquisition of a suburban site in northwestern Shanghai as it readies the second phase of the company’s retail-anchored Lifehub@Anting project, Mingtiandi can reveal.

The Shanghai-based commercial developer led by one-time Shui On Land executive Henry Cheng, told Mingtiandi it will invest a total of $400 million in the second phase of the project in the city suburb.

With construction pegged to kick off in August, phase two of the project near Shanghai International Auto City will double the existing retail space in the development to 140,000 square metres (1.5 million square feet) as well as adding 60,000 square metres of office space.

Chongbang is making its move four months after Singapore sovereign wealth fund GIC was reported to have purchased the undisclosed shareholding of Hong Kong’s Edward Wong Group, which was an early investor in the company, for an unspecified amount.

GIC, Canada’s Ivanhoe Cambridge and Dutch pension-fund manager APG each own about a quarter of the company, according to a source close to Chongbang who spoke to Mingtiandi.

Expanding in Jiading

Expected to reach completion in 2023, Chongbang is pushing forward with its plans for the second phase of Lifehub@Anting eight years after opening the 70,000 square metre shopping mall which comprises phase one.

Located in the car manufacturing hub of Anting within Shanghai’s Jiading district, the mixed-use development is 110 metres from Anting station on Metro Line 11.

Generating annual sales last year of approximately RMB 950,000 million ($133,731) Lifehub@Anting attracted 20 million visitors to its collection of mid-market retailers and casual dining offerings including Uniqlo, McDonald’s and Starbucks.

Hoping to build on the success of its first Anting venture, Chongbang’s expansion of the commercial project will be designed for energy saving and sustainability with LEED certification the ultimate aim, according to the company.

Chongbang sold the 15,000 square metres of office space developed as part of phase one for RMB 263.5 million in 2013 to real estate investment firm MGPA, before it was acquired by BlackRock in the same year.

The 50,000 square metres of residential in phase one has also been sold, while phase two will not contain a residential component, according to the company.

Seeking Tenants Post-COVID

Chongbang’s plan to enlarge its retail footprint in suburban Shanghai comes as the coronavirus pandemic has transformed the mainland’s retail landscape, according to Savills’ head of research for China, James Macdonald.

“To the extent that COVID-19 has had an impact on the retail market it has been to dampen discretionary demand, increase online consumption and reduce potential size of catchment areas as consumers stay closer to home if possible,” said Macdonald.

The research chief pointed out, however, that community retail centres such as Chongbang’s Lifehubs, had been some of the best performing retail assets over the last five months, although a surge in supply of decentralised office space has triggered growing competition for tenants.

Analyst estimates indicate that first floor retail space at Lifehub@Anting may fetch in the region of RMB 10 to RMB 20 per square metre per day, while office space could fetch RMB 4 to RMB 6 per square metre per day.

Growing a Portfolio of Suburban Shopping Centres

Chongbang has built up a portfolio of six retail-anchored projects under the Lifehub brand since the company was set up 17 years ago, with the developer completing its latest Shanghai project to bear the brand – Lifehub@Upbund – ten months ago.

Located in “core retail precincts” of the Yangtze river delta hubs of Shanghai, Hangzhou and Suzhou, the mixed-use complexes range in size from 80,000 to 800,000 square metres.

In addition to its Lifehub projects, Chongbang also developed the high-end Sinan Mansions retail development in Shanghai’s downtown Huangpu district. The pedestrian village of 49 restored villas opened in 2010 and includes a hotel, apartments and commercial space.

The retail developer’s first project in Shanghai, LifeHub@Daning in Zhabei district, was completed in 2004.

Drawing Institutional Backers

Chongbang is expanding its portfolio of large-scale retail developments five years after the company closed its second institutional capital raising, which drew $920 million in commitments.

Canada’s Ivanhoe Cambridge and Dutch pension-fund manager APG led the funding round, after Singapore’s sovereign wealth fund, GIC, had previously taken an undisclosed stake in the developer.

Diana Li provided research for this story.