Asia’s largest REIT buys Metropolitan Plaza mall in China’s Western Guangzhou

Metropolitan Plaza, the landmark shopping mall in Western Guangzhou has been sold to Link REIT, Asia’s largest REIT. This deal is believed to be the largest shopping mall transaction in South China in recent years.

“It is true that e-commerce players are challenging brick-and-mortar retailers in mainland China. However, a good shopping mall offering unique, all-round experience is without a compeer. When we bought Metropolitan Plaza for owner in 2013, we saw its superior location and the broad prospect of high quality shopping malls as well. The owner further improved the tenant mix and upgraded the mall with innovative techniques. The disposal of Metropolitan Plaza is a typical deal of the retail property in mainland China, which shows such malls will be appealing to investors,” said Alvin Yip, Managing Director, Co-Head of Investment & Advisory Services, China

The deal was run by Cushman & Wakefield, a global leader in real estate services.

Located in Liwan District and in the core of the traditional Xiguan CDB of Guangzhou, Metropolitan Plaza is the only mid to high-end shopping mall in the area. The four-floor mall directly connects Xiguan Huangsha station (the interchange between Line 1 and Line 6).

It was built in 2006 by reputable Hong Kong developer Cheung Kong Property and Hutchison Whampoa Property and opened in 2012, offering over 88,000 sqm GFA of retail space. In late 2013, Cushman & Wakefield disposed it to a real estate private equity fund managed by GAW Capital Partners.

The mall enjoys a footfall of 3 million monthly.

China General Chamber of Commerce data shows that the revenue of 100 key large retailers in mainland China dropped by 0.5% in 2016. According to the Statistics Bureau of Guangzhou Municipality, Guangzhou realized total retail sales of RMB 870.65 billion. This growth rate of 9.0% is the highest among the four tier-1 cities in mainland China. The mature market and strong purchasing power of Guangzhou lays a solid foundation for the rapid development of Guangzhou retail property, thus making the city a popular choice for Hong Kong and oversea investors.

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