7. Real Estate

§ There are already a large number of shopping centres in Beijing and Shanghai, giving the potential retail investor a good choice of what can be described as quality projects. Most of the malls are mixed-use projects encompassing elements of office, apartments, hotels and other facilities.

§ Some points to note for a smooth start to business in China: all too often, retailers jump into a leasing contract without closely reviewing the details, thus incurring large costs as they establish the shop. With a little planning, these can either be avoided, or be a known factor at the commencement of the contract.

§ English contracts are generally provided. However, in the event of any legal action, the Chinese version is the one that counts; be sure to have it translated and checked thoroughly.

7.a Site

§ Choose a site carefully – “do your homework” on the demographics of the location and any future works that will affect business flows, as you would do anywhere in the world. In China, it is not always that clear when or if things will change; get several opinions from independent sources and then make your decision.

7.b Things to Check

§ If the mall accepts Wholly Foreign Invested Enterprises, your local contact should do some work with the district Commercial and Industrial Bureau.

§ Is there ample parking?

§ If the property has office towers, what is the level of occupancy, and what type of companies are on the premises?

§ Signage opportunities: the regulations in many locations are very fluid. Advertising companies handle most signage contracts, so beware of empty promises.

§ Access for delivery trucks should be checked, as in some districts there are local regulations in force.

§ Check the Management Company of the mall, who it is, and if its service is responsive.