Swire Properties’ chief executive Tim Blackburn has concluded a fruitful trip to mainland China, securing a deal last week to develop a new mixed-use project in Shanghai’s Pudong district, breaking ground for Swire’s second luxury retail project in Guangzhou and pushing forward its Taikoo Li mall project in Xi’an.
In Shanghai, Swire signed a letter of intent with Lujiazui Group to develop a 600,000 square metre (6.5 million square foot) mixed-use project in the Qiantan area. The development will be an encore partnership for the Hong Kong-listed blue chip with the developer owned by the Pudong district government, following the launch of the Taikoo Li Qiantan mall, a Swire Properties representative told Mingtiandi.
“Swire Properties has always been firmly committed to Shanghai, and optimistic about the long-term potential of the Pudong New Area. We are keen to further scale up our investment in Pudong,” the Swire spokesperson said.
The site, referred to as Qiantan Lot No. 21 by local media, is located to the east and across the street from the Taikoo Li Qiantan mall. The project in one of the Pudong government’s favourite development zones targets a gross floor area almost five times as large as Taikoo Li Qiantan.
Taking Over From Hongkong Land
A 2021 plan for the Qiantan project shows that Lujiazui Group intends to develop two high-rise office buildings, and four residential towers spanning a total of 600,000 square metres or nearly double the scale of Swire’s 322,000 square metre HKRI Taikoo Hui JV in Jing An district.
The partnership with Swire gives Lujiazui Group, which is the master developer for Qiantan, a second opportunity to develop the combined office/residential complex after another Hong Kong commercial property specialist had walked away from the project more than three years ago.
Lujiazui Group had signed a cooperation framework agreement with Hongkong Land in 2015 to jointly develop the site at an estimated investment of around RMB 20 billion ($2.8 billion) in investment.
However, the deal was terminated in December 2018 because “certain conditions precedent were not fulfilled”, according to a statement by the division of Jardine Matheson Group in March 2019.
Zhu Zhisong, the Pudong New Area party secretary, praised the Taikoo Li Qiantan mall in a meeting with Blackburn last Wednesday and welcomed Swire to invest further in the area to help Pudong become a hub for international consumption, according to a statement posted on the Shanghai government’s website.
The 116,000 square metre Taikoo Li Qiantan mall opened in September last year with stores from 24 brands making their China debut.
The Pudong government has focused on attracting regional and international developers to Qiantan, with US developer Tishman Speyer having opened its Crystal Plaza mixed-use project there in 2018, and Shun Tak Holdings currently building its New Bund 31 in the area formerly occupied by the Shanghai Expo.
In addition to signing the deal for the Shanghai project, during his mainland tour Blackburn also made stops in Guangzhou, the capital of Guangdong Province, and Xi’an, the capital of Shaanxi Province.
Breaking Ground in Guangzhou
While in Guangzhou, Swire, together with the city government and Pearl River Enterprises Group held a contract-signing and ground-breaking ceremony for the Julong Bay commercial project on September 16, according to a report by Guangzhou Daily.
Swire and Pearl River, a company owned by the local government, will jointly build a waterfront commercial project in the Julong Bay, Bai’etan section of Guangzhou’s Liwan District, according to the report. The two companies had signed a cooperation letter of intent for the Julong Bay project in October 2021.
The Julong Bay project is Swire’s second investment in the city after the company opened its first mainland project, Taikoo Hui Guangzhou, in the city during 2011.
Mainland Expansion Targetted
Swire’s latest projects are part of a HK$100 billion ($12.7 billion) mainland investment plan Swire introduced earlier this year targeting projects in Hong Kong, mainland China and Southeast Asia.
Half of the funds for that initiative have been allocated to the mainland market, with a focus on retail-led mixed-use developments in Tier 1 and “emerging Tier 1” cities, including Shanghai, Beijing, Guangzhou, Shenzhen, Chengdu and Xi’an.
In March, Swire formed a joint venture to acquire a high-end retail site in Xi’an through a government land sale for RMB 2.57 billion. The 70:30 joint venture agreed to invest up to RMB 10 billion in a mixed-use project dubbed Taikoo Li Xi’an, which would become the fourth Taikoo Li commercial project on the mainland.
In August, Swire announced plans to open a luxury hotel in Shenzhen under The House Collective brand.
Last Tuesday, Swire Properties and Sino-Ocean Group celebrated the 10th anniversary of their JV commercial complex INDIGO in Beijing. Swire representatives said during the event that foundation works for Phase II of INDIGO are under way with that RMB 23 billion project set to be completed in 2026.