Honglou to buy Infiniti Plaza | Shanghai Daily

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December 9, 2009

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Honglou to buy Infiniti Plaza

CHINA Honglou Group, a private enterprise in Zhejiang Province mainly involved in tourism and property, is planning to acquire a major shopping mall in downtown Shanghai on Huaihai Road M. owned by the real estate investment arm of Morgan Stanley for about 1.42 billion yuan (US$208 million).

The deal, yet to be secured as an official contract hasn't been signed, comes less than four months after the United States bank agreed to sell The Exchange, an office building on Nanjing Road W., to Beijing developer SOHO China for 2.45 billion yuan.

Neither companies could be reached for comment yesterday, but an insider said final agreements might be signed later this month.

Located at the intersection of Huaihai and Longmen roads, the 40,700-square-meter shopping mall was acquired by Morgan Stanley Real Estate in mid 2005. According to earlier reports, the bank bought the 6-story building from two companies - paying HK$846 million (US$109 million) for a 92-percent stake and 78 million yuan for the remaining 8 percent.

Morgan Stanley later renamed the building the Infiniti Plaza and reopened it to the public in October 2007 after interior refurbishing and readjustment of its tenant mix.

The shopping plaza was popular during the first few months of operation, particularly with the younger generation, but vacancy rates began to rise as visitor numbers dropped.

The deal, if completed, will be the second major acquisition by Honglou in Shanghai. The Hangzhou-based firm, founded by Zhu Baoliang, a Zhejiang Province native ranked No. 793 in this year's Hurun rich list, acquired a 6-story, 16,900-square-meter retail and office complex in the Yuyuan Garden area in Huangpu District from a local developer for 460 million yuan, according to a statement released in September by the Shanghai United Assets and Equity Exchange.

Shanghai's real estate investment market started to rebound in the second quarter of this year, buoyed by the country's improving economy as well as abundant liquidity.

As of November, major real estate investment deals, those more than US$10 million, reached 20.8 billion yuan in Shanghai, with more than 80 percent involving domestic investors, according to property services provider DTZ. That already surpassed the 18 billion yuan for the whole of 2008.




 

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