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  2005 March Issue
   
Cover Story
The Place: Bejing's most exciting retail concept
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India's Retail Scene - A study of contrasts
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Convention session opens with focus on RFID
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Raffles City brings a little Shanghai to Singapore
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HOFEX 2005 - an entrée into Asia's hospitality and F&D markets






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Cover Story
The Place: Bejing's most exciting retail concept

 

Come June next year, Beijing will be buzzing with excitement over the imminent opening of THE PLACE, its newest — and possibly most ambitious — retail and leisure development to date.

Slated to soft open by then, THE PLACE breaks new ground on Beijing’s retail scene with its distinctive concept, ambience and superb facilities, one that promises shoppers and visitors an absolutely smooth, sensual and enjoyable experience under one roof.

The RMB1.2 billion (US$145 million) project, located on the west side of Beijing’s Central Business District (CBD), is owned and developed by Beijing Aozhong Xingye Real Estate Development Co Ltd.

Occupying a total space of 211,200sqm, the mixed development consists of two Grade A office towers,a two-row five-level retail and entertainment centre, and an outdoor retail experience.

Trends Communications Co Ltd, one of China’s leading publications conglomerates, whose stable of magazines includes Cosmopolitan, Esquire, Trends Home, Harper’s Bazaar, Good Housekeeping and FHM, has committed to occupying an entire office block to be named Trends Tower.

THE PLACE’s architectural features are guaranteed to be the talk of the town. These include: A unique Grand Stand; a beautiful Leisure Walk; and a fantastic Sky Screen that will be the longest in Asia and definitely a signature landmark in Beijing.


The most significant characteristic about THE PLACE, however, lies in its retail concept.

Retail mix
While Beijing currently has many shopping malls, dining areas and recreational facilities, they are located in different areas. THE PLACE will, for the first time, combine them all. Hence, shoppers and visitors will be able to shop at THE PLACE for all kinds of products, from fashion to lifestyle, groceries and electronics; exercise at the fitness centre; dine at any of the myriad of F&B outlets and gourmet restaurants; and relax, entertain or get together at a variety of night spots and recreational centres.

The 80,000sqm shopping centre, housing some 180 stores, will be a utopia for shoppers and visitors alike — in the day and at night. It is a dream come true for retailers seeking a great location to sell their products and services.

Said Fan Xianyong, head of directors, Beijing Aozhong Xingye Real Estate Development Co Ltd: “THE PLACE will be the place for everyone in Beijing. It will satisfy Beijing’s need for a challenging and stimulating retail and fun-filling centre, one where you can shop, wine and dine, relax and be entertained in.”

In developing THE PLACE, Beijing Aozhong Xingye took into consideration all of the key factors: Location, trade and tenant mix, architectural features, landscaping, lifestyle trends and Beijing’s need for a well-managed retail and entertainment centre. It even “made a sacrifice” to enable it to create that vibrant, colourful and unique shopping environment.

“We could have built a taller retail complex, but we sacrificed that, keeping to four storeys instead, because we wanted to have a free flowing area for shoppers and visitors, and the best and most comfortable shopping environment all year round,” said Fan.

At the same time, the company was aware of the dearth of good shopping facilities — particularly one that brought retail, dining and entertainment under one roof — for people working and living in the CBD, a huge catchment area just waiting to be tapped into. Which is why Beijing Aozhong Xingye is confident THE PLACE fills an allimportant niche in the CBD.

Strategic location
THE PLACE is superbly located. Sitting right in the centre between the Chaowai commercial district, the First Embassy Area and the west core of the CBD, it opens onto Dong Da Qiao

Road, the main road servicing the western part of the CBD. It is in close proximity to the China World Trade Centre, the China Central TV headquarters, Kerry Centre, Shangri-La Hotel, The Spaces office tower, Central Park Apartment and Global Trade Mansion, among many other major developments.

As the CBD is Beijing’s bustling metropolis, the hub of its business and commercial activities and property developments, the potential for retail business is extremely positive — and growing by the day as the CBD itself is being developed.

According to Fan, a quarter of the CBD is now completed and the rest is under construction. When fully completed, the CBD (expected to be around four sq km in size) will have some 200 buildings (equivalent to 10.9 million sqm of space, consisting of 50% office, 25% residential, and 25% retail, cultural and entertainment facilities).

Its significance is reinforced by the fact that by the end of 2003, the CBD had attracted 70% of Beijing’s direct foreign investment. More than 60% of multinational companies in the city are already housed there, and more than half of Beijing’s five-star international hotels and Grade A office buildings will be located in it by 2007.

Add to these the number of residents living in apartments and condominiums in the area, the neighbouring embassy residences and so on, and it is an obviously huge retail potential. In fact, the total population living or working in the CBD is currently estimated at a daily 500,000, plus another 10,000 business travellers and shoppers.

Daily F&B consumption alone is estimated at around RMB10 million in the CBD.

Target segments
Most of the retail areas in Beijing currently cater for specific consumer categories. For example, Wang Fu Jing, Beijing’s most historical district, is most popular among tourists; and Xi Dan targets the masses and the young. THE PLACE, however, will have a balance of retail and lifestyle retailers aimed at the higher income shoppers as well as the young and trendy.

David Hand, managing director of Jones Lang LaSalle’s Beijing office, emphasises this idea: “THE PLACE was so named to capture this essence of being ‘the place’ for everyone to meet, shop and have fun. The CBD location is very international and cosmopolitan, and THE PLACE is going to reflect this, in the way it’s been designed, the way the retail layout will work, and in the trade and tenant mix it will have.

“Where merchandise is concerned, there will be high-quality and branded merchandise that will appeal to higherincome spenders, as well cool and trendy stuff that will be affordable to the young and to other groups. THE PLACE will be affordable enough to allow you to make a purchase each time you visit.”

Beijing Aozhong Xingye and Jones Lang LaSalle, sole leasing agent and retail consultant for THE PLACE, is in the process of selecting tenants for the project.

The retail concept, according to Chun Meiling, associate director of retail investor services at Jones Lang LaSalle in Beijing, will be based on two shopping sections in the retail centre. The North Shopping Strip targets mainly the expatriates and high-income executives who will be more sensitive to brands and quality of products and services.

The South Shopping Strip will provide a more fun and casual feeling, targeted at the young and trendy whitecollar workers aged between 20 and 30.

Comprising mainly speciality stores, such as fashion boutiques, accessories outlets, bookstores, beauty and healthcare and fitness stores, and outlets offering a variety of food, THE PLACE will mark a major shift from the kind of department-store shopping that Beijing consumers have been used to so far. Retailers can also expect excellent and unique shop-front positioning for their stores.

“It will also allow people to have the option of staying back after work to go for drinks, rather than rushing home after dinner, and to meet up with friends over the weekends. I think THE PLACE is likely to usher in a change in Beijing city lifestyle.”

Market outlook
What is also important to note is its timing. THE PLACE is being developed at just the right time — when Beijing is becoming “the place” to be for retailers, both domestic and foreign.

A recent Jones Lang LaSalle’s sentiment survey — Asia revealed that retailers planning to expand showed Shanghai and Beijing as the top two destinations for future store locations.

Conducted over the period mid- November to mid-December 2004, the survey was based on the response of more than 70 prestigious retailers from a wide variety of trades in nine key cities across Asia (excluding Japan and India).

The finding is hardly surprising. Spurred by high economic growth, personal incomes in China have been rising over the years and, along with it, higher retail spending. Beijing people, for example, enjoyed an 11.4% increase in disposable income in 2003; their consumption grew by 8.1% during the same period.

Retail and F&B expenditure reached RMB27 billion in 2003, up 7.8% from the year before. Beijing’s retail sales ranked first in China that year. However, while the demand is there, retailers have not been expanding fast enough in Beijing because of the shortage of good shop spaces and well-managed shopping centres. Over and above, this fundamentally strong market is the 2008 Olympics games, which is poised to add even further impetus and activity.

For developments like THE PLACE, it will be a bright horizon all the way.


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