Henderson Global Investors advises RDM Asia and investors on the formation of Joint Venture (CN)
Tuesday 22 May 2012
|The Silk Road Holdings joint venture brings together a dynamic group of specialist real estate investors including the Italian Fingen Group of the Fratini Family, the Luxembourg-based China Outlet Mall controlled by Jacopo Mazzei, Gaw Capital Partners from Hong Kong, the Sino-US Waitex as well as a major US institution. The objective of Silk Road is to invest into the outlet mall sector targeting the acquisition and development of outlet malls across China.|
|The partners not only bring a significant equity commitment (US $200 million+) but also a complementary set of skills that is unique in the market. The combined team brings an unprecedented degree of international outlet expertise, luxury retail network, development capability and local market knowledge which promises to set a new standard for the China luxury outlet sector in terms of design, brand representation and consumer experience.|
Henderson Global Investors is acting as the investment advisor for the joint venture alongside RDM Asia (the real estate development company of the Fingen Group in Asia) who is the operating and development partner. Together they bring an unmatched experience in this niche sector in China, leveraging their European experience and success. Waitex and Gaw Capital Partners will work together with RDM Asia providing local knowledge and development experience in China.
The joint venture has completed its first acquisition - Florentia Village - Jingjin Designer Outlet - a 41,000 m² designer outlet center near Beijing. Designed and developed by RDM Asia, with Fingen and Waitex as founding investors, Florentia Village opened In June 2011 as China's first authentic Italian outlet village. It houses 165 stores with the strongest mix of luxury and premium Italian, International and Chinese brands available in the market offering guaranteed discounts on goods year round for shoppers. Florentia Village is the only outlet in China today hosting Prada, as well as other European fashion giants in its line up.
The JV aims to replicate the successful model in other major cities in China with plans in place to develop a portfolio of at least four additional schemes. New sites have been identified in key gateway cities with construction scheduled to start in 2012 with the cooperation of local municipalities that recognize the extraordinary value added and quality brought by the schemes developed by RDM Asia.
Through the acquisition of Florentia Village and the identified pipeline of other sites, the joint venture intends to capitalize on the outsized growth in spending in the Chinese luxury goods sector.
Commenting on the appointment as Investment Adviser, Chris Reilly, Director of Henderson Property Asia, said: "We are extremely confident about the prospects for the luxury retail sector in China. Chinese consumers are very brand conscious and expect a sophisticated shopping experience with high quality service and premier brands. RDM's Designer Outlet Centers provide this combination at significantly discounted prices which we believe is a formula for success. To be appointed as investment adviser for this exciting joint venture is a great endorsement of our expertise and capability within the outlet mall sector.
Jacopo Mazzei, CEO of RDM Asia explained "The Florentia Village project has established a new benchmark for Designer Outlets in China. The brand mix achieved in the center is one of the most prestigious of the world and unheard of in China. This is mainly due to our strong relationship with all top brands in Europe, US and China and our understanding of their needs; we are able to create a high quality environment with strongly attractive and efficient design combined with first class operations in the center.
"Such high brand quality and nice environment with the addition of the diversity offered has successfully attracted thousands of visitors every week, since day one, confirming that this new concept for China is working extremely well. Our main target audience is the middle class who are showing, on top of a very strong brand consciousness, an increasing capacity of spending power. Certainly retail is, and will be, one of the hottest sectors in China and Designer Outlets will represent a niche with extremely high growth potential.
Alice Breheny, Head of Research at Henderson, added: "The retail sales growth story in China is compelling with international and domestic retailers expected to continue their aggressive expansion plans. We believe the rental growth prospects for Chinese luxury outlets will be correspondingly impressive as retailers compete for the best assets.
"Luxury brands have some of the most ambitious expansion plans for the Chinese market but will be more astute than mass-market retailers with regards to location. Specialist outlet malls that bring together likeminded retailers, and provide the quality of shopping experience that discerning Chinese consumers increasingly demand, should perform very well."
Source: Henderson Global Investors
United States of America
Real Estate Investment