Mingtiandi

Asia real estate and outbound investment news

  • Facebook
  • LinkedIn
  • RSS
  • Twitter
Sign Up / Login Logout

Lost your password?
Register
Forgotten Password
Cancel

Register For This Site

A password will be e-mailed to you.

  • Capital Markets
  • Events
    • Mingtiandi 2022 Event Calendar
    • APAC Residential Forum 2022
    • Asia Logistics Forum 2022
    • Asia REIT Forum 2022
    • APAC Data Centre Forum 2022
    • Singapore Focus Forum 2022
    • Office Strategies Forum 2022
    • More Events
  • MTD TV
  • People
  • Logistics
  • Data Centres
  • Asia Outbound
  • Retail
  • Research & Policy
  • Advertise

LVMH-Backed Fund Puts Down $100M to Join Rush into Outlet Malls

2015/01/25 by Michael Cole Leave a Comment

Sasseur Art Commercial Plaza

Sasseur Art Commercial Plaza is one of Sasseur’s projects in Chongqing

China’s tigers and flies may be hiding their Gucci bags and Prada purses in the closet this year, but an investment fund belonging to one of the world’s largest luxury purveyors is betting $100 million that demand for logos and fine leather will rebound soon.

According to an article this week in the Wall Street Journal, L Capital Asia, a Singapore-based fund manager backed by LVMH Moët Hennessy Louis Vuitton SA is putting its money into Sasseur Cayman Holding Ltd, a Chinese developer of outlet malls which now has four such projects selling discounted luxury items in China.

The investment by L Capital is a bet that outlet malls, long a staple of cost-conscious shoppers in the US, but only recently introduced to China, will catch on with the country’s famously label-driven consumers. However, the private equity firm and its partners will face stiff competition from other outlet developers on the mainland.

Planning for 20 New Malls

Sasseur opened its first mall in Chongqing in 2008, and armed with its new funding plans to add four more outlets this year. Within the next five years the developer is targetting 20 shopping centres nationwide.

Florentia Village

Florentia Village in Wuqing, near Tianjin

Many analysts fear that China’s cities may be on their way to an oversupply of mall space and that developers may have overshot consumer demand. Dalian Wanda alone has opened more than 100 shopping centres in the last ten years, but recently announced plans to close or restructure at least 30 of its department stores.

According to a 2014 survey by Knight Frank, due in part to an anti-corruption drive by China’s government, most luxury retailers missed their targets for store expansions in 2013, and anecdotal reports since then have been increasingly negative regarding demand for luxury items.

However, Sasseur and L Capital are betting that outlets offering big brands at deep discounts will be the exception to the luxury rule.

“Outlet malls are countercyclical,” Sasseur’s founder and chairman Vito Xu was quoted as saying in the Journal account. “When retail sales fall, there is more excess inventory that needs to be cleared and more demand for bargain shopping.”

Sasseur Set to Compete with International Outlet Developers

While Sasseur is able to boast of strong performance for its malls to date, saying that sales have increased 30 percent per year since it opened in 2008, international developers are also busy building suburban shopping temples for luxury lovers.

Value Retail's Suzhou Village

Value Retail’s Suzhou Village

US outlet developer Value Retail, which has developed and operates a chain of luxury outlet malls across Europe opened its first China shopping centre in Suzhou in April last year, and also has big plans for more malls in China.

Value Retail’s Shanghai outlet, located next to the city’s Disneyland resort, is expected to offer shoppers in China’s biggest city 50,000 square metres of discounted luxury brands when it opens in autumn this year, and the US company is targetting three more outlets in China within the next four years, with a total investment of around $450 million.

Another international company, Florentia Village, is building a chain of faux-Italian villages in China also offering discount luxury merchandise.

Florentia, which is invested by Silk Road Holdings, a joint venture of Gaw Capital Partners, Chinese-American investment group Waitex, Italy’s RDM, and TIAA Henderson Real Estate, opened its first outlet in Wuqing near Tianjin in 2011.

The private-equity backed mall developer is nearly ready to open a Florentia Village in Pudong, not far from the city’s international airport. Now Florentia has plans for more projects in Guangdong’s Foshan (also this year), Chongqing, Chengdu, Wuhan and Qingdao.

Share this now

  • LinkedIn
  • Share
  • Tweet
  • Email

Filed Under: Retail Tagged With: L Capital Asia, outlet mall, Retail, Shopping mall, Vito Xu

https://vimeo.com/722412109

Leave a Reply

Your email address will not be published. Required fields are marked *

Get Mingtiandi Delivered

MTD TV

mtd tv dc forum north asia panel thumbnail
Hyperscalers Shaping Data Centre Demand in North Asia: MTD TV
japan btr3
Investors Diversify Japan Multi-Family Acquisitions in Search of Yield: MTD TV

More MTD TV Videos>>

People in the News

Serena Teo Ascott
Asia Real Estate People in the News 2022-07-04
trent iliffe
ESR-Logos REIT Adds Trent Iliffe to Board, Appoints Karen Lee as Deputy CEO
serene nah kerry
Kerry Properties CFO Resigns After Less Than 8 Months on Developer’s Board
Lu Yi Shimao
Asia Real Estate People in the News 2022-06-27

More Industry Professionals>>

People in the News

Asia Real Estate People in the News 2022-07-04

Serena Teo Ascott

2022 has now passed the mid-year mark and that milestone has spurred a wave of board moves this week including new … Read More>>

ESR-Logos REIT Adds Trent Iliffe to Board, Appoints Karen Lee as Deputy CEO

trent iliffe

The manager of ESR-Logos REIT announced a flurry of people moves on Friday to round out the board of directors and … Read More>>

Kerry Properties CFO Resigns After Less Than 8 Months on Developer’s Board

serene nah kerry

Hong Kong-listed developer Kerry Properties waited until the city was transfixed with the arrival of a visitor from the … Read More>>

Asia Real Estate People in the News 2022-06-27

Lu Yi Shimao

A senior appointment by one of China’s crew of defaulting privately-controlled developers leads this week’s roundup of … Read More>>

More Industry Professionals>>

Latest Stories

Serena Teo Ascott
Asia Real Estate People in the News 2022-07-04
Du Shuanghua Bright Ruby
Mercatus Selling 16 Collyer Quay in Singapore to China’s Bright Ruby for $717M
carol Lofter Group
SC Capital, Lofter Apply to Buy Out $108M Hong Kong Project

Sponsored Features

Should Proptech Give Us Sleepless Nights?
Hong Kong’s Evolving Commercial Real Estate Landscape
Opportunities in the Greater Bay Area

More Sponsored Features>>

MTD-QR-Code-320

Connect with Mingtiandi

  • Facebook
  • LinkedIn
  • RSS
  • Twitter

Real Estate News

  • Capital Markets
  • 2022 Event Calendar
  • MTD TV Archives
  • People
  • Logistics
  • Data Centres
  • Asia Outbound
  • Retail

More Mingtiandi

  • About Mingtiandi
  • Contact Mingtiandi
  • Mingtiandi Membership
  • Newsletter Subscription
  • Advertise
  • Terms of Use
  • Privacy
  • Join the Mingtiandi Team


© 2007-2022 China Advertising Media Ltd (Samoa). All rights reserved.