L’Avenue is often called the LV building, or just the UGG boot by locals
L Real Estate, a private equity vehicle controlled by the family behind luxury conglomerate LVMH, has reportedly exited its investment in a Shanghai commercial project after selling out its 50 percent stake to a company controlled by Angela Leong On Kei, a Hong Kong businesswoman and consort of Macau gambling billionaire Stanley Ho.
L’Avenue International Holdings, a privately held holding company controlled by Leong took 100 percent possession of L’Avenue, a 140,000 square metre (GFA) office and retail complex in Shanghai’s Hongqiao area, from the French luxury firm in a previously undisclosed transaction earlier this year, according to accounts in the Shanghai Daily and Forbes Asia.
Leong Names Holding Company After Shanghai Project
L Real Estate had reportedly been trying to dispose of its share of the boot-shaped commercial project since early 2015, only to see the property linger on the market for more than one year, despite record demand for prime assets in first tier Chinese cities, especially in Shanghai.
No price has been announced for the transaction, however, a rumoured sale of the project to Blackstone which was reported last year, put L Real Estate’s asking price at around RMB 5.3 billion ($799 million) at the time.
William Wang, head of L’Avenue International Holdings’ China operations, reportedly confirmed the sale to the Shanghai Daily, as well as acknowledging his company’s status as sole owner of the project on Hongqiao’s Xianxia Road. L’Avenue International was set up by Leong to manage her property portfolio, which also includes more than a dozen buildings in Hong Kong, as well as assets in Beijing, Shanghai and Macau.
Retail Slowdown May Have Hurt Luxury Development
Angela Leong On-kei now controls 100% of the Shanghai project
Leong, who is commonly referred to as Ho’s “fourth wife” acquired her 50 percent stake in the 31-storey tower when the assets of the ailing 94-year-old tycoon were divvied up among his family members. Sociedade de Turismo e Diversões de Macau (STDM), which is Ho’s primary holding company, set up a 50-50 joint venture with LVMH chairman and CEO Bernard Arnault in 2009 to develop the distinctively designed project.
Rather than attracting customers to L’Avenue, however, the projects’s association with LVMH and its stable of luxury brands may have proved a drag on revenues rather than a plus for the suburban project. Retail sales growth slowed to 10.3 percent in China during July, with ecommerce accounting for much of that expansion.
With the Xi Jinping government continuing to crack down on conspicuous consumption and corruption, sales for retailers such as Louis Vuitton, Dior, and Fendi – all of which anchor L’Avenue – have been particularly disappointing. L’Avenue has 40,000 square metres of retail space in addition to just under 100,000 square metres of office space.
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