Treasury China Trust (TCT) and Ginwa Group have committed to a strategic partnership to tap into the growing commercial property market in central and western China.
The agreement, which will initially focus on Xian, will likely serve as TCT’s springboard into the untapped commercial real estate market of the inland cities.
Xian, the capital of Shaanxi and known as the home of the terracotta warriors, has recently enjoyed exponential growth in retail sales.
The second-tier city saw a 19.7 percent year-on-year growth in the retail market last year, recording a turnover of 138 billion yuan (S$26.6 billion).
“The western China market is known for its desire to keep pace with China’s fast-growing coastal cities and this partnership provides a genuine opportunity for TCT and the Ginwa Group to secure a market leadership position,” said Wu Yi Jian, chairman of Ginwa Group.
While growth in the inland provinces is rapid, it is restricted by the limited availability of retail space.
Multinational retailers face a shortage of commercial property built and managed according to international standards.
Ginwa Group, which has been in Xian for two decades, controls the Hong Kong-listed China Golden Development Holdings Ltd, which owns and runs department stores in key major capital cities in China’s central and western provinces under the label Century Ginwa.
TCT’s move, which follows its recent strategic alliance with Qingdao’s Trio group for the expansion into Shandong province, is in line with its plan to expand through strategic acquisitions in the retail sector and geographic expansion.
Commenting on the partnership, Richard David, chief executive of TCT, said: “Xian is an exciting market for commercial real estate investment and development, and our partnership with the Ginwa Group combines our key strengths in the delivery of a significant pipeline of quality transactions that will achieve growth in both net asset value and net operating income.”