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Investors develop China retail JV

An international team of real estate investors has joined together to develop retail outlets across China.

The entity, to be called Silk Road, includes the Italian Fingen Group of the Fratini Family, the Luxemburg-based China Outlet Mall controlled by Jacopo Mazzei, Gaw Capital Partners from Hong Kong, the Sino-US Waitex and “a major US institution”.

The objective of Silk Road is to invest in the outlet mall sector targeting acquisition and development of such malls across China. The partners not only bring an equity commitment (US$200 million+) but also a set of skills that it believes is unique in the market. 

The combined team brings an international outlet expertise, luxury retail network, development capability and local market knowledge and aims to set a new standard for the China luxury outlet sector in terms of design, brand representation and consumer experience.

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Fingen Group’s real estate service company Henderson Global Investors acts 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.

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Based in Singapore, Henderson Global Investors currently manages European Outlet Mall Fund and UK Outlet Mall Fund in partnership with McArthurGlen and holds 12 outlet malls across seven countries.

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, the Florentia Village (pictured) – Jingjin Designer Outlet – a 41,000 sqm designer outlet centre 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. Florentia Village houses 165 stores with the mix of luxury and premium Italian, international and Chinese brands.

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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 complexes. New sites have been identified in key gateway cities with construction scheduled to start in 2012 with the cooperation of local municipalities that recognise 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 capitalise on the growth in spending in the Chinese luxury goods sector.

Henderson Property Asia director Chris Reilly said the company is confident about the prospects for the luxury retail sector in China.

“RDM’s Designer Outlet Centres 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.”

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Jacopo Mazzei, CEO of RDM Asia said: “The Florentia Village project has established a new benchmark for designer outlets in China. The brand mix achieved in the centre 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 centre.”

Alice Breheny, head of research at Henderson believes that rental growth prospects for Chinese luxury outlets will be correspondingly impressive as retailers compete for the best assets.


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