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Elaine Chan

YAOHAN International Holdings is confident consumers will cross the Huangpu River to shop, despite ongoing infrastructure development in Shanghai's Pudong new area.

 Group chairman Kazuo Wada said: 'I have no worries about Pudong because many consumers are coming to Pudong [to spend].'   The group's Nextage Shanghai Commercial Tower, tipped to be Asia's largest department store, is due to open in two weeks' time in Pudong's Lujiazui zone.

  The store will have a gross floor area of 1.55 million sq ft and is a joint venture between Yaohan International Holdings, Yaohan Japan Corporation and Shanghai No. 1 Department Store.

  Mr Wada said 100 million people per year would visit the store, which was 10 times the size of the total retail space in the group's Hong Kong operations.

  Total investment in the store is US$235.7 million, in which the group has a 36 per cent interest, Yaohan Japan a 19 per cent stake and Shanghai No. 1 45 per cent.

  Mr Wada said the property was bought at a relatively low price in September 1992. Since then, the value had doubled.

  He said they had not been hit by the expected massive supply of commercial space coming on stream in Pudong: 'I have no worry about this because about 90 per cent of our space has been rented. I know that with many other commercial buildings, only about 10 per cent of the space has been leased.'   He said 7.5 million sq ft of floor space had been developed for commercial use in Pudong.

  The group's other major property investment is used to accommodate the Shanghai International Merchandise Mart (IMM), a distribution centre which opened in June this year.

  The joint venture is with Shanghai Nan Fang Shang Cheng, Shanghai Liannong Co and Singapore IMM.

  It is in Shanghai's Minhang district and has a total gross floor area of 839,592 sq ft.

  The distribution centre will provide merchandise support to the Nextage Shanghai store.

  Mr Wada said they had purchased properties to operate their wholesale and retail businesses.

  Whether future investments involved purchasing properties depended on the market at that time.

  Property developer Pudong Development Holdings is also investing in a US$25 million four-storey shopping centre in Pudong.

  The company will build the centre with one of the four government-appointed Pudong real estate developers, Shanghai Lujiazui Finance and Trade Zone Development Co, in the zone's Zhuyuan Commerce and Trade Area.

  The company holds 60 per cent of the deal.

  The shopping centre will be built on a 279,864 sq ft site and the total gross floor area will be 753,480 sq ft.

  The four-storey structure can house 700 shops, two levels of underground parking and food stalls.

   China has forecast the value of retail sales this year will be 1.95 trillion yuan (about HK$1.79 trillion), a rise of 22.6 per cent over last year's number.

  Sales have soared but the number of customers has not risen fast enough. The number of stores is also increasing.



Huangpu River no sales barrier, says Yaohan