The last several months have seen a number of developments at Hawai‘i’s largest shopping mall. The Ala Moana Center has seen the debut of Target, the return of Sears, and the introduction of a gym. But on a national level, shopping malls are in decline. And in Asia, a billion dollar deal involving shopping malls in China tells an economic story beyond the stores. HPR’s Bill Dorman has more in today’s Asia Minute.
One of Asia’s largest property developers is selling more than a billion dollars’ of shopping malls in China to another large developer. The transaction is noteworthy not just for its size, but for a contrasting view of China’s retail future.
Singapore-based CapitaLand is selling its interests in 20 shopping malls across 19 Chinese cities for about 1.3 billion dollars. The company is shrinking its retail floor space in the country by nearly a third—but is hardly giving up on the market.
Instead, CapitaLand is shifting its bets—concentrating them in five urban clusters: Beijing, Shanghai, Shenzhen, Wuhan and Chengdu—cities it sees driving China’s retail future.
Those buying the shopping malls are led by another developer, China Vanke, leading a consortium that includes Chinese private equity investors.
They are betting that smaller Chinese cities also have a strong consumer future.
Analysts refer to those smaller cities as “tier three”—but they’re not exactly tiny with populations between 150,000 and 3 million.
While shopping malls are still being built in China and other parts of Asia, that’s not the case in the United States.
The Wall Street Journal reports the last major shopping mall built in America opened more than three years ago…in Sarasota, Florida.