Hong Kong developer Hang Lung is eyeing China’s booming luxury market as Shanghai’s flagship Plaza 66 shopping center expands

The company has received approval from the local government to use an unused area to expand the 55,000-square-meter shopping center in West Nanjing Road, Jingan District.

The expansion, expected to be completed in 2026, will provide an additional gross floor area of ​​approximately 3,000 m², accommodating 20 stores. Hang Lung also owns and operates Grand Gateway 66 in China’s financial megapolis.

Beijing has high expectations for consumption to drive and consolidate economic recovery this year. While China reported better-than-expected economic growth of 5.3 percent in the first quarter, retail sales remained sluggish, growing at an annualized rate of 3.1 percent in March, up from 5.5 percent growth in January and February.

The global personal luxury market is expected to reach $464 billion by 2025 and $606 billion by 2030, with an average annual growth rate of 6 percent, according to PwC’s luxury market report published last week. mainland China and Hong Kong.

Meanwhile, China is expected to replace the US as the largest luxury market by 2030, worth $148 billion, the report said. It highlights that about 92 trillion yuan ($12.7 trillion) of wealth in China will disappear over the next 30 years. passed on to the second generation of wealthy individuals.

Even at the height of the Covid-19 pandemic in China, the number of members spending more than 1 million yuan at Plaza 66 increased fivefold in 2021 compared to 2019, according to Hang Lung, which will release the latest figures with its interim publication. profit in July.

Hang Lung categorizes its members into five tiers, with Emerald and Sapphire being the top two tiers. While Emerald membership is by invitation only, Sapphire consists of members who spend 1 million yuan or more per year.

Lam said the customer base of China’s high-end retail market is “getting younger” due to rapid economic development. As a result, this generation of customers continues the consumption patterns of the previous generation, she added.

About 75 percent of Plaza 66 and Grand Gateway 66 members were under the age of 39, she said, adding that luxury brands launched youthful products aimed at the segment with higher purchasing power.

The pursuit of quality and the way brands are perceived are very different than before, said Nicholas Poon, managing director of Grand Gateway 66.

“People attach more importance to some emotional needs than to prices,” he said.

Hang Lung has been actively investing in the Chinese commercial and residential real estate market since 1992. According to its latest annual report, mainland operations currently account for 68 percent of the company’s rental income.

It has seven office projects in six cities in China and five residential projects in Shanghai, Wuxi, Kunming, Wuhan and Shenyang.

Founded in 1960, Hang Lung Properties is 60 percent owned by Hang Lung Group.

Current faction chairman Ronnie Chan Chi-chung, who has held the position since 1991, will retire on April 26 and his son Adriel will take over, according to recent filings on the Hong Kong stock exchange.

The senior Chan, 74, has no plans to take on the role of non-executive director after his retirement, the documents showed.