Tesco looks East for growth and plans new Chinese stores
TESCO yesterday announced a £100m tie-up with Asian investors to build three shopping centres in China as the first stage of a larger building programme.
Britain’s biggest supermarket has signed an agreement for a 50-50 venture with investors including HSBC Nan Fung China Real Estate Fund, Singapore’s Metro Holdings and Hong Kong’s Nan Fung Group.
This joint venture will comprise three shopping malls in Anshan, Fushan and Qinhuangdao, each of which includes a Tesco hypermarket as the anchor tenant. Two of these – Anshan and Fushan – are mixed-use developments including retail, entertainment and residential properties.
Tesco currently operates 65 hypermarkets and six small stores in China, comprising approximately 6m sq ft of space and generating £417m sales in the six months to 29 August 2009.
As part of a long-term strategy for substantial investment in China, it will open 18 new hypermarkets in the 12 months up to February 2010.
A Tesco spokesman said: “We’re applying the experience we’ve gained in other markets to develop the shopping centre model, which we think will be profitable. We have been looking to work with other investors.”
HSBC advised on the deal, which will see Tesco competing further in China with other international retail brands such as France’s Carrefour, Germany’s Metro and the US retailer Walmart.
• Apple, the maker of the enormously popular iPhone, also said it would open two stores in Shanghai.