Bargains on high-end brands will be headed to Sichuan next year as a European investment consortium has broken ground for a $110 million outlet mall in the provincial capital of Chengdu.
The ground-breaking last month was a formal recognition of plans, which were first reported in Mingtiandi earlier in November, for the Florentia Village outlet chain’s fourth China location, after earlier openings in Tianjin, Shanghai and Guangzhou. The new outlet centre is expected to open during the fourth quarter of 2016.
Like the earlier locations, the Florentia Village Designer Outlet Mall in Chengdu’s Pixian district will be managed by RDM Asia, and is owned by Silk Road Holdings, a joint venture between Italy’s Fingen Group, a Luxemburg-based vehicle owned by Jacopo Mazzei, Gaw Capital Partners from Hong Kong, and the Sino-US Waitex group, as well as a major US institution. TH Real Estate, which is owned by TIAA-CREF acts an investment advisor to Silk Road.
Chengdu Location to Help Outlet Chain Reach $940M in Revenues in 2016
The 120,000 square metre, (1.3 million square foot) outlet in Chengdu is part of a rapid expansion by the Florentia Village group which hopes to expand revenues across the chain to $940 million in 2016.
“The growth story of retail sales in China is compelling with international and domestic retailers expected to continue their aggressive expansion plans, said Chris Reilly, Managing Director, Asia Pacific for TH Real Estate. “We believe the rental growth prospects for Chinese luxury outlets will be correspondingly impressive as retailers compete for the best assets.”
After opening its initial location in Tianjin in 2011, the group has opened two more mainland locations, in Shanghai and Guangzhou, this year. For 2015, the group expects to generate $700 million in turnover, and to attract seven million visitors to its suburban locations.
In addition to the Chengdu location, three more mainland outlets, in Wuhan, Chongqing and Qingdao are slated to open in 2017. All locations are planned to include the group’s trademark Italian village-style architecture, with the Tianjin location already having become a popular tourist destination for locals eager to snap photos of its canals and gondoliers.
Outlets Grow as Clouds Form Over Downtown Locations
Suburban outlet malls offering discounts on luxury goods have appeared to be a bright spot on China’s retail scene this year, as concerns grow over a saturation of the retail market in city centres, particularly for the luxury sector.
In January of this year, L Capital Asia, a Singapore-based fund manager backed by LVMH Moët Hennessy Louis Vuitton SA invested $100 million into mainland outlet mall operator and developer Sasseur Cayman Holding Ltd with plans to expand the company’s portfolio of mainland outlets.
Both Sasseur and Florentia Village are competing with European outlet mall chain Value Retail, which opened its first mainland outlet mall in Suzhou last year, and is expecting to launch a new outlet centre near Shanghai’s Disney Resort in the spring of 2016.