L Real Estate sells stake in Shanghai project

L Real Estate, a private equity vehicle controlled by the family behind French luxury conglomerateLVMH, has reportedly sold out its stake in a Shanghai commercial project to a company controlled by Hong Kong businesswoman Angela Leong On Kei.

L’Avenue International Holdings, a private holding company controlled by Leong, an associate of Macau gaming billionaire Stanley Ho, took 100 per cent control of L’Avenue, including a 140,000 sqm office and retail complex in Shanghai’s Hongqiao area, according to Shanghai Daily and Forbes Asia.

No price has been revealed for the transaction, but a report of the property being sold to Blackstonelast year put the asking price at around RMB 5.3 billion (US$799 million).

Leong acquired her half share in the 31-storey tower when the assets of the ailing 94-year-old Ho were divvied up among family members, reports real-estate publication Mingtiandi. Sociedade de Turismo e Diversões de Macau (STDM), Ho’s primary holding company, set up a 50-50 JV with LVMH chairman/CEO Bernard Arnault in 2009 to develop the project.

With retail sales growth slowing in China, particularly with the government cracking down on conspicuous consumption and corruption, sales for retailers such as Dior, Fendi and Louis Vuitton – all anchor brands at L’Avenue – have been disappointing. L’Avenue has 40,000 sqm of retail space as well as nearly 100,000 sqm of office space.

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