JV will tap regional market with focus on China, India
JONES Lang LaSalle has teamed up with Australia’s Colonial First State Property Management to launch a retail property management venture, the first of its kind in Asia.
The 50:50 company, Sandalwood, will aim to tap into a growing market for retail malls in particular, with China and India being the prime areas of focus. The Singapore-based firm will help developers and landlords in the development and management of shopping centres, with its existing ambit covering around 40 malls in the region. It will also provide consultancy and leasing services.
Between 2006 and 2012, an estimated 1,000 malls are being built in the region, according to Jones Lang LaSalle.
‘This is our most significant investment in our retail business in the region,’ Jones Lang LaSalle chief executive officer (Regional Business Lines & Corporate Solutions) John Forrest explained.
‘Retail is also quite a specialist thing. With shopping centres it’s much more of a living entity, and a key driver for why we wanted to bring in Colonial, with its depth of experience in managing malls.’
Colonial First State Property is one of Australia’s largest property development, management and leasing specialists, having undertaken more than 25 large shopping centre developments since it was launched in 1983.
It currently manages 36 centres on behalf of third party clients across Australia.
According to Mr Forrest, the joint venture will initially focus on Singapore, Hong Kong, China, Macau, Taiwan, Indonesia and India as its key markets.
No details were given on the capital that both firms have injected into the venture.
Around 740 staff from both the companies will move into Sandalwood. The venture officially launches on June 1.
One of Sandalwood’s first major projects will be a shopping mall in Ningbo, China. According to Mr Forrest, Singapore is a market where the joint venture would like to take on a major project that would become a flagship.
He also expects China and India to account for a large percentage of their project work, with retail space in these markets growing amid rising middle class incomes and potent spending power.
According to Jones Lang LaSalle’s latest Retailer Sentiment Survey, the region is experiencing robust growth and optimism.
In all, 76 per cent of respondents in the poll said that they anticipate higher growth in turnover in 2008. Nine out of 10 survey respondents said that they plan to expand their retail operations.
Cities such as Hong Kong have been enjoying a prolonged retail rebound on the heels of strong economic growth and consumer confidence.
January retail sales were more than 23 per cent higher than the same period a year ago, totalling HK$25.7 billion (S$4.5 billion).
However, economists are expecting more modest growth for the rest of the year as inflation begins to bite and consumers wait on the sidelines amid global economic uncertainty.
Although Hong Kong saw its gross domestic product grow by 6.3 per cent in 2007, the government has cited a slowdown in the US and Europe as a possible dampener, with growth this year expected to be in the region of 4 per cent.
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