China’s Wanda Group is targeting 1000 shopping malls by 2025, this is a nine-fold increase from the end of 2014.Wanda is the largest commercial property developer in the country and is betting on an increase in consumer activity.
According to the chairman of Wanda Group, Wang Jianlin, the group plans to open a minimum of 50 ‘Wanda Plazas’ per year from 2016 and plans to have between 400 and 500 shopping malls by 2020, and around 1000 by 2025. It will place its focus on third and fourth-tier cities. At the close of last year, the group had 109 relevant plazas.
China’s economy is slowing and its growth at the start of 2015 was the slowest for a six-year period. The real investment growth during 2015’s first quarter was the lowest since 2009.
Wanda is planning to make use of an ‘asset-light’ strategy for its growth. It will look for external funding investment for its plazas and intends selling them after a five or seven-year period. The company has released a statement stipulating the launch of a wealth management product during May. The product will offer investors an annual return of 6% and plaza disposal profits are to be shared with these investors.
This fundraising scheme was introduced after four investors agreed to contribute US$3.87bn over a two-year period to erect about 20 shopping malls. This is the first time external investors have been used to fund Wanda Plazas.