McDonald's China forms partnership with property developer Evergrande

McDonald’s China said it has formed a strategic partnership with Chinese property developer Evergrande Group, and that the latter will provide locations for McDonald’s future expansion in China.

McDonald’s would also help to strengthen Evergrande’s commercial facility in its property projects nationwide.

“CITIC has extensive resources and networks and will help drive McDonald’s collaboration with top tier domestic enterprises," Chairman of CITIC Group Chang Zhenming said in a statement. "The partnership with Evergrande will push forward its expansion into third and fourth tier cities."

“The opening of more McDonald’s outlets will also help attract more foot traffic for Evergrande’s commercial property projects in the future,” he added.

Chairman of CITIC Group Chang Zhenming and Evergrande Group Chairman Xu Jiayin, as well as the executive teams of both sides, attended the signing ceremony of the deal.

McDonald’s said at the end of last month that it has completed the transaction to sell a majority stake to form a new company that would run all of McDonald's outlets in China's mainland and Hong Kong.

CITIC and CITIC Capital has a controlling stake of 52 percent in McDonald’s China, and would take up to four seats on the company’s seven-member board of directors.

By 2020, approximately 45 percent of all of McDonald’s 4,500 restaurants in China will be located in third and fourth tier cities, with presence in 300 lower tier cities. Currently about 35 percent of its existing 2,500 stores are in third or fourth tier cities.