Private equity real estate investment advisory company MGPA’s Asia Fund III has acquired a 50% interest in Galleria Chengdu, a high quality newly completed retail mall with retail GFA of 53,619 sqm in Chengdu, a gateway city of western China. The property was developed by GTC China Real Estate Holdings (GTC), who retains the remaining 50% interest in the mall.
Completed in 2010 and with a total site area of approximately 20,896 sqm, Galleria Chengdu is a four-storey (plus two basement levels) stand-alone retail development with a cinema on Level 4. The first level of basement has retail shops and car parking and the second solely car parking. This mid-end positioned mall currently has an opening rate of 72% and is anchored by several well renowned retail tenants, including Zara and H&M, which distinguish the property from its surrounding competitors. The property is located in the New South Area of Chengdu, a fast growing area of the city, and a key retail location populated by destination retail attractions such as the popular hypermarket chain Auchan (a domestic hypermarket) and big box retail operators IKEA and Decathlon. The New South Area is also a designated development area by Chengdu municipal government, which has recently relocated its headquarters there from the main central area of Chengdu.
John Saunders (pictured), MGPA’s CEO Asia ex-Japan, says: "We are extremely excited to be back into acquisition mode for Asia Fund III and to be investing in China again. Our investment strategy here was to acquire a newly completed retail mall in the emerging district of South Chengdu, leveraging the region’s strong growth of retail sales and consumer expenditure as well as the significant supply-demand imbalance of high quality retail space in the surrounding area.
“Much of the recent investor focus has been on eastern China. However, we believe western China merits close focus as the new high speed rail links are expected to have a dramatic impact on this region, and Chengdu especially, over the medium term.”
