LVMH Create Luxury Shopping Paradise in Shanghai

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"Fashion Lookin West" Billboard at L'Avenue Shanghai

The Maosuit recently reported on the land grab underway by fashion and luxury brands in shopping malls throughout China.  Yet its not just individual brands competing for hot property in China. The luxury conglomerates led by LVMH are also getting into the real estate development game.

In an unremarkable area in Western Shanghai’s Hongqiao district, at the intersection of Xianxia Road and Ziyun Road lies L’Avenue, a new first-class retail and office complex being developed by Shanghai Luxchina Property Development Company Limited which is a USD 500 million joint venture between L Real Estate and STDM.

L Real Estate is part of the complex and multi faceted investment firm Groupe Arnault, owned by luxury tycoon (and fourth richest person in the world)  Bernard Arnault who is also Chairman and CEO of the luxury conglomerate LVMH. STDM is owned by Hong Kong billionaire Stanley Ho, who’s business interests include real estate, casinos, entertainment and shopping.

Little is known about L Real Estate or the L’Avenue projects underway in China and neither is mentioned in LVMH’s 2011 Annual Report. Google and Baidu (Chinese search engine) don’t reveal much either.  Including L’Avenue in Shanghai The Maosuit is aware of at least one other L’Avenue complex being developed in the Northern Chinese city of Shenyang.

The biggest task for any new luxury mall in China is getting a critical mass of high-end brands, (say a minimum of ten) which will make the mall a ‘destination’ and draw customers. With hundreds of malls popping up all over China and each luxury brand having their own particular store development strategy, getting this critical mass of brands can be exceptionally difficult. By investing in and developing their own malls LVMH easily overcomes this issue and is able to bring a retinue their own brands including: Louis Vuitton, Dior, Fendi, Tag Heuer, Chaumet  and De Beers etc. to create a LVMH luxury shopping paradise in each L’Avenue complex.

In marketing L’Avenue Shanghai LVMH is positioning it as the new destination for fashion, luxury and business in West Shanghai. Designed by Leigh & Orange Ltd. with a gross floor area of around 140,000 sqm. and spanning 28 floors, L’Avenue Shanghai will include a high-class shopping mall and grade A office complex.  The development is supported by the local government and upon completion in May 2012 L’Avenue is set to become the major landmark building in the Chang Ning district of Shanghai.

It is believed that L Real Estate will oversee the project development, marketing and operations of the shopping mall, while STDM will oversee the office building.  Whatever the break of responsibilities between L Real Estate and STDM with Bernard Arnault and Stanley Ho behind the project and with the power of LVMH the L’Avenue’s in Shanghai and other Chinese cities are sure to be launched with much fanfare and make a significant impact on the luxury retail business in China.

"Luxury Looking West" Billboard at L'Avenue Shanghai

L'Avenue Shanghai Construction Site in May 2011

L'Avenue Shanghai Construction Site in May 2011

L'Avenue Shanghai External Rendering (Source: Baidu)

L'Avenue Shanghai Internal Rendering (Source: Baidu)

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