State-backed Greenland Group said it has taken full ownership of a suburban Shanghai shopping centre after paying RMB 2.35 billion ($33 million) to buy out its partner in the project.
Greenland Group acquired the 50 percent stake in that it didn’t already own in the JSWB Global Home Furnishings Center from Chinese furniture maker Jisheng Wellborn (JSWB) through an equity transfer agreement, as announced to the Shanghai stock exchange.
Following the completion of the acquisition, Greenland indicates that it intends to seek approval to have the 305,000 square metre (3,282,993 square foot) property reclassified as an industrial project in part to leverage its proximity to the Shanghai Western Software Information Park, as city officials promote the development of the Greater Hongqiao development effort.
Greenland Aims to Build AI Park on Shopping Centre Site
“With the support of the local Qingpu government, (Greenland) will reposition and upgrade the existing furniture center,” the Shanghai-government owned developer declared in its filing, as part of a plan to create a high tech park on the site.
“The group will build a world-class artificial intelligence innovation center on the original site as well as providing facilities for corporate headquarters, hotels and residences and other community amenities,” Greenland indicated.
The announcement by Greenland comes after tenants at the shopping centre were informed on 6 September that Greenland will take full possession of the project, with planned upgrades slated to start in November of this year. The repositioning is planned to be completed within four years.
Greenland indicated in its statement that it expects to book investment income of RMB 2.1 billion through the acquisition as the company realises an upgrade in value for its existing stake in the project.
Qingpu Becomes a Commercial District
Previously considered as a far-flung suburban area, Qingpu district is now key to the Shanghai government’s masterplan for an 86 square kilometer Greater Hongqiao Business Area centred on the Hongqiao transportation hub. The business area, which includes the Shanghai Western Software Information Park among other projects, is set up to link neighboring districts with the broader Yangtze River Delta into a new commercial community.
Located at 5369 Middle Jiasong Road in Shanghai’s Qingpu district, the JSWB Global Home Furnishings Center is next to the Middle Jiasong Road station on Shanghai metro line 17, and was originally developed as a joint venture between Greenland and furniture retailer starting in 2006.
The two partners each invested an initial RMB 235 million in the joint venture, with the 147,200 square first phase completed in 2007 and held for self-use by the Greenland-JWSB joint venture.
The full project, which involved a second phase completed in 2010 required a combined investment of RMB 1.6 billion. 39,800 square metres of the 157,800 square metre second phase was sold to investors on a strata basis with the remainder retained by the joint venture.
The property, which is located about 10 kilometres southwest of the Hongqiao transport hub in western Shanghai, provides showroom and shop space for 500 furniture, building materials and homeware brands across 14 themed pavilions.