Sector Real Estate
Creating retail destinations
China’s retail sector is expected to become the world’s largest in 20192, with growing consumption powered by the country’s more than 350 million millennials3. Despite representing only 25 per cent of China’s population, those born in the last two decades of the 20th century are responsible for 65 per cent of the country’s total consumption growth4.
Building on this trend, MAM launched Macquarie China Retail Company in partnership with HIP China Retail in 2011 – aiming to create and curate a diversified portfolio of experiential retail destinations across China. Over six years, MAM sourced and structured over $US1 billion worth of investments, including arranging and refinancing debt and providing co-investment capital. Today, the portfolio’s properties receive more than 8.7 million visitors each year5.
These investments have seen MAM lead the development and renovation of retail projects across five Chinese cities. This has included the design and construction of a greenfield shopping centre which opened to the public in Xi’an in 2018, as well as the complex remodelling of an operating asset housed in an iconic heritage-listed building on Shanghai’s premier shopping strip.
With a focus on the environmental impact and sustainability of the portfolio, MAM is also supporting properties as they invest in energy efficiency measures. This includes replacing existing metal halide lamps in carparks with energy saving LED lighting, adding sensors to escalators to increase energy efficiency, and working closely with tenants to incentivise consumers to reduce plastics and coffee cups through tailored promotions in malls.
Adapting to changing markets
To ensure the portfolio’s retail offering remains relevant to millennial consumers, MAM (as part of a 50/50 Joint Venture with Pradera Limited) established Pradera Retail Asia – a specialist retail asset and property manager.
Overseeing approximately 5,800 tenant relationships, Pradera Retail Asia’s team of more than 130 professionals adapt and manage the tenant mix of retail properties to meet the evolving demands of consumers.
Retail at the cutting-edge
Andrew Taylor, Senior Managing Director
All information current as at 31 March 2019, unless otherwise stated.