The latest high-end retail offering from Hong Kong developer Hang Lung is preparing to launch in Tianjin this year, adding an award-winning design and 152,000 square metres of new space to one of China’s most overbuilt cities.
The Kohn Pedersen Fox (KPF) designed mall has already won several awards, including the “MIPIM Architectural Review Future Project Awards 2007 – Retail & Leisure Commended Certificate” issued by MIPIM and The Architectural Review.
The mall design also received the “2010 AIA New York Chapter’s Design Awards” in the unbuilt work category, issued by the American Institute of Architects New York Chapter. The structure is also expected to achieve certification as a LEED Gold building.
Tianjin a Market Leader in Overcapacity
Unfortunately, for what will be one of the longest single structures in the region, stretching over 350 meters, it opens into one of China’s most overbuilt urban areas, where heavy government and private investment have been outstripping demand.
An October market study by real estate consultancy CBRE said of Tianjin’s mall scene,
The competition in the retail sector intensified as new supply surged, imposing significant challenges on existing projects. In Q3 2013, we observed a shopping mall closure in Tianjin, in addition to several cases of proactive tenant-mix adjustments across the nation. The Tianjin project shut down despite its recent repositioning.
According to a recent statement by the architects, however, the structure of Riverside 66 is now completed and the building enclosure will be finished this April, with the mall scheduled to open in September 2014, as the developer goes forward with pushing the project onto the market.
Hang Lung Already Pessimistic
The aggressive scheduling by Hang Lung is surprising in light of recent comments by the company’s chairman, Ronnie Chan Chi-chung, warning of decreased demand for retail space, particularly from high-end retailers.
Speaking to the Hong Kong press in January this year Chan said, “The mainland leasing market has entered into the winter and I have no idea when the spring will return.”
The real estate tycoon pointed clearly to the central government’s anti-corruption drive as the leading cause of luxury retail woes. “In the past two years, I couldn’t dine with more than four officials at once as a culture of thrift is being encouraged,” said Chan.
A report issued last week by property consultancy Knight Frank found that luxury retailers in China had, on average missed their targets for new store openings in 2013 by 65 percent, and also pinned blame for the shortfall on the anti-corruption drive.