Hang Lung Properties officially opened its largest shopping mall yet in the mainland on Friday, in northeast Dalian, despite a glut of large retail outlets, a flagging local economy and a fall in demand for luxury brands due to the country’s ongoing anti-corruption campaign.
The high-end site, offering 220,000 square metres of retail floor space, is the company’s eighth mainland mall, after others Shanghai, Wuxi, Tianjin, Jinan and Shenyang.
The new Olympia 66 is at the intersection of the city’s most prominent thoroughfares. It features a 300-meter-long facade decorated with about 3,000 fish scale-shaped glass ornaments.
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Speaking at the opening ceremony, chairman Ronnie Chan admitted the new mall was being launched at the “most difficult time” for his company in more than 20 years after it first started its mainland adventure in early-1990s. But he adding, that in the past that some of “the most difficult times have proved to be the best times” for Hang Lung.
The company’s mainland rental revenue declined 4 per cent in the first half of 2016 to HK$2 billion, according to its recent interim results announcement.
Excluding the effect of currency movements, revenue rose just 2 per cent and net profit fell 3 per cent. Chan insisted, however, that while the Hong Kong market had offered the best investment opportunities in the past 50 years, “the best over the next 20 to 30 years lie in the mainland”.
The Dalian project has cost the company 7 billion yuan to develop, and it has earned 50 million yuan in rental income since the start of its trial operation, in December 2015.
It claims to have 70 per cent occupancy, although the interim report revealed it to have 62 per cent at June 30. The vacancy rate for the ground floor is high, but is much lower on the higher floors.