3 6 Ke·2025-12-15 07:38Core Viewpoint - The luxury retail landscape in Shanghai is undergoing significant changes, with traditional players like Shanghai Hang Lung Plaza facing challenges from new entrants and changing consumer preferences. The partnership between Hang Lung Properties and Shanghai Jiubai to manage the Meilong Town Plaza is a strategic move to expand their market presence and adapt to these shifts [2][8][16]. Group 1: Strategic Moves - Hang Lung Properties has announced a collaboration with Shanghai Jiubai to take over the commercial operations of Meilong Town Plaza, expanding its retail footprint by approximately 96,000 square meters, increasing the total area of Shanghai Hang Lung Plaza by 44% to about 312,300 square meters [2][5]. - The partnership is described as having "epoch-making significance" by Hang Lung's CEO, indicating the importance of this move in the context of Shanghai's luxury retail market [2][5]. - The renovation of Meilong Town Plaza is set to transform it into a comprehensive commercial landmark, incorporating retail, hotel, and office spaces, with plans to introduce a luxury hotel for the first time [7][11]. Group 2: Market Challenges - The luxury retail sector in Shanghai has faced a downturn, with Hang Lung Plaza experiencing a 24% decline in tenant sales in 2022 and a further 8% drop in the first half of 2023 [9][10]. - The limited size of Hang Lung Plaza, at 53,700 square meters, is seen as a constraint on its ability to accommodate larger brand offerings and meet consumer demand [10]. - The competitive landscape is intensifying, with new luxury retail developments in Shanghai, such as the Louis Vuitton flagship and other high-end brands, challenging the traditional dominance of Hang Lung Plaza [16]. Group 3: Financial Performance - Hang Lung Properties reported a 6% decline in overall rental income for 2024, marking the first drop after 24 years of continuous growth, with mainland rental income down by 5% [12][13]. - The company is shifting its strategy towards a lighter asset model, focusing on existing projects rather than expanding into new cities, as indicated by its "Hang Lung V.3" strategy [13][14]. - Recent acquisitions, such as the 20-year operating rights for Hangzhou Department Store and Wuxi New World Department Store, reflect a strategic pivot to enhance existing market positions rather than aggressive expansion [15][16].