by FoodBizDaily.com staff writer
November 13 2009 - Britain’s largest retailer, Tesco, is to invest about £100m in a joint venture to develop shopping malls in China which will see its hypermarkets as anchor tenant, according to reports.
The company is to build large shopping centre developments in Fushan, Anshan and Qinhuangdao in a 50-50 joint venture with HSBC Nan Fung China Real Estate Fund, Metro Holdings of Singapore and Nan Fung Group of Hong Kong.
Each mall will have a Tesco hypermarket as its anchor tenant, with two of the centres being mixed-use developments, according to ft.com. The structure is said to allow Tesco to expand in China in a capital-efficient way.
Lucy Neville-Rolfe, Tesco’s corporate and legal affairs director, said: “It is very encouraging that our fellow investors see the scale of the opportunity in China and the appeal of these exciting developments in the country’s growing northern cities.”
Tesco, which had lagged behind rivals such as Carrefour, Metro and Walmart in entering the Chinese market, is set to open 18 new hypermarkets in China by February, in addition to the 65 hypermarkets and six small stores it already has in the country.
If the first shopping centre developments are successful, Tesco could roll out a series of malls in the country.
Tesco chief executive, Sir Terry Leahy, said last month that the group's Asian business performed strongly compared with its businesses elsewhere.
Korea, where Tesco acquired the Homever hypermarkets last year, performed particularly strongly.
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About Tesco PLC
Tesco PLC is an international retailer. The Company is engaged in retailing and associated activities in the United Kingdom, the Republic of Ireland, Hungary, Poland, the Czech Republic, Slovakia, Turkey, Thailand, South Korea, Malaysia, Japan, China and the United States. The Company also provides retail banking and insurance services through its subsidiary Tesco Personal Finance PLC (formerly Tesco Personal Finance Group Limited) (TPF). The Company has two business segments, retailing and financial services. Retailing Services includes the Company’s online shopping channels, tesco.com and Tesco Direct; Telecoms; Tesco Personal Finance (TPF), and dunnhumby, its consumer research business.