West is where the money is
For Hong Kong’s mall developers, the phrase “Go West” means go to Chengdu.
The capital of Sichuan province in southwest China is one of the top ten cities to invest in out of 280 urban centers in China. That and other advantages have drawn Hong Kong developers to invest some US$1.3 billion to build malls in Chengdu.
Among the Hong Kong heavy hitters betting on Chengdu are Swire Properties Ltd; Sun Hung Kai Properties Ltd., the world’s second-biggest property company; Henderson Land Development Company and Wharf Holdings Ltd.
Swire’s US$1 billion retail and office project in the Chunxi Road area will include almost 111,484 square meters of mostly street-level shopping space. It will open in early 2014
Wharf Holdings is scheduled to complete its Chengdu IFC, a high-end residential and commercial complex of 4.7 million square feet, in mid-2013.
“It’s almost like they’re creating a Causeway Bay here,” said Backy Fung, managing director for western China at Savills.
These Hong Kong investors are have gone west after the Hong Kong government imposed property curbs that contributed to the city’s slowest economic growth in three years. Western China, of which Chengdu is a part, is home to a quarter of China’s population.
Beijing’s “Go West” policy aims to allow western China to catch up with wealthier coastal areas such as Shanghai and Guangdong province.
“It’s still very hard to find good shopping malls in Chengdu,” said Eddie Ng, managing director for the city at property broker Jones Lang LaSalle Inc. “Luxury brands couldn’t find proper space here. The projects coming onboard in the next few years will change the retail landscape.”
China's state council has designated Chengdu as the country's western center of logistics, commerce, finance, science and technology, and a hub of transportation and communication. It is also an important base for manufacturing and agriculture.