Gaw Sells Chengdu Outlet Mall to Fund Backed by Vipshop, CPIC, MetLife for $220M

Florentia Village Chengdu spans 75,000 square metres (Image: Gaw Capital Partners)

Gaw Capital Partners has sold an outllet mall from its portfolio to a new fund under its management, in a deal which prices the retail property in the city of Chengdu at RMB 1.56 billion ($220 million), according to an announcement on Thursday.

The Hong Kong-based fund manager is selling Florentia Village Chengdu to a “pre-REIT” fund backed by mainland e-commerce player Vipshop, China Pacific Insurance Group Co (CPIC) and MetLife China, according to the statement, with Gaw pointing to the deal as evidence of its ability to work with domestic funds. 

“This investment also marks another important step in our continued exploration of RMB-denominated opportunities, as we expand our onshore platform to align with the diversified demand of domestic investors and partners, said Humbert Pang, managing principal, head of China and co-chair of alternative investments at Gaw Capital Partners.

Following the deal, Gaw Capital will act as co-general partner of the pre-REIT fund, together with mainland investment firm GSUM Fund Management, with both companies holding 0.643 percent stakes in the vehicle holding the asset. 

Online to Offline
Prior to the transaction, the 75,000 square metre (807,293 square foot) retail property had been 50 percent owned by Harvard University-affiliated Harvard Private Capital Realty with Italian property developer Fingen Group, which operates the mall, holding a 15 percent stake and a Gaw-managed vehicle owning 20 percent, according to records from the local anti-trust regulator.

Kenneth Gaw, president and managing principal at Gaw Capital Partners

“Outlet malls have been a highly successful investment strategy for us, and this acquisition represents the recapitalization of an asset from our long-standing joint venture platform, which we established with our partners in 2012,” said Kenneth Gaw, president and managing principal of Gaw Capital Partners.

Vipshop, a fashion ecommerce player backed by Tencent and JD.com, is now the biggest shareholder in Florentia Village Chengdu, having paid RMB 651.2 million for a 41.88 percent stake in the pre-REIT fund, Lishui Huilian Ruitong Equity Investment Partnership.Total funding to the vehicle is RMB 1.56 billion, according to government records.

The investment marks the latest online move for the New York Stock Exchange-listed company after Vipshop bought five China outlet malls from Zhejiang-based conglomerate Shan Shan Investment Holdings in 2019.

Next on the mall’s roster of owners is CPIC with a 32.15 percent stake and MetLife with a 15.82 percent holding. State-owned Shenwan Hongyuan Group and Hong Kong private firm Top Sharp Limited also own minority stakes.

Fingen will continue to manage the property following the sale, with a record on business information search platform Aiqicha showing that the European outlet mall specialist continues to hold a 2.49 percent stake in the asset. 

Outlets Find New Owners
The Chengdu shopping centre is one of seven Florentia Village locations developed by Silk Road Holdings, a joint venture between Gaw, US financial services giant Nuveen, US apparel firm Waitex Group and Fingen Group from 2011 through 2021.

Opened in 2017, the Chengdu location was expanded to approximately 75,000 square metres in June last year, making it the largest outlet within the Florentia Village portfolio. statement 

Silk Road had invested RMB 700 million to develop the first two phases of Florentia Village Chengdu, and another RMB 230 million on phase III of the project, according to government announcements.

The property achieved 21 percent year-on-year sales growth during this year’s May Day holiday and 19 percent year-on-year sales growth last year, according to the statement.

The mall chain now lists seven outlets in Greater China on its website, including one location in Hong Kong.

Gaw’s announcement of its Chengdu mall sale comes after the firm’s Gateway Real Estate Fund VII teamed up with unnamed financial partners to acquire Florentia Village Guangzhou for around $66 million in April 2023, according to official records.