US mall operator Taubman Centers Inc set up a second joint venture with Beijing Wangfujing Department Store (Group) Co Ltd, one of China's largest department store chains, to open a shopping center in Zhengzhou, Henan province, in a bid to tap the country's expanding mall market.
The mall is scheduled to open in the second quarter of 2015.
Taubman invested $35.5 million and will have a majority interest in the project along with the Chinese firm, while Maple (Zhengzhou) Real Estate Development Co will have a minority stake.
The multi-level mall, which will be anchored by a Wangfujing Department Store, will have a supermarket, cinema screens, a children's play area and a mix of international and local middle to high-end brands. It will also offer food and beverage services.
In August last year, Taubman and Wangfujing announced their first retail project in Xi'an. That mall is expected to open in the third quarter of 2015.
"The fast growth of China's per capita GDP, disposable income and retail sales brought us to this unparalleled market," said Zhang Guohua, managing director of Taubman China, which entered the country in 2011.
In addition to the capital investment, the US company will bring its know-how in international shopping center design and retail development, as well as its management skills to the Chinese market, Zhang said.
Taubman's key responsibilities will be to guide the design, leasing process, tenancy design and coordination, merchandising, management and marketing of the mall, he said.
"The strategic partnership with Taubman in China resonates with our strategy to accelerate our expansion into the shopping center industry, on top of our department store business," said Liu Bing, chairwoman and president of Wangfujing.
Zhao Lei, an official with Wangfujing's chairwoman office, said that shopping centers offering a comprehensive shopping experience through a mix of shops, restaurants and entertainment facilities are a rising trend in China.
Last year, China's shopping centers for the first time beat department stores in terms of revenue, said Guo Zengli, president of the China Shopping Center Development Association, adding that half of the top 10 retailers measured by revenue in 2012 were shopping centers.
The number of Chinese shopping centers increased to 3,100 in 2012 from 400 in 2001. Guo estimated that the figure will climb to 4,000 in 2015.
He said that retailers are mainly interested in the 20 to 30 percent of the 3,100 shopping centers with strong management teams, adding that shopping centers operated by foreign companies usually have a better performance than their local peers.
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