Tesco has signed an agreement to set up the first in a planned series of joint ventures to develop shopping centres in China.
Some 50 per cent of the joint venture will be owned by a syndicate of leading Asian investors, including HSBC Nan Fung China Real Estate Fund, Singapore's Metro Holdings Ltd and Hong Kong's Nan Fung Group.
This joint venture will comprise three shopping malls in Anshan, Fushan and Qinhuangdao, each of which includes a Tesco hypermarket as the anchor tenant. Two of these - Anshan and Fushan - are mixed-use developments including retail, entertainment and residential properties.
The malls are part of Tesco's long-term strategy to invest in building a substantial business in China. Tesco will open 18 new hypermarkets in China in the 12 months up to February 2010.
Oriel Securities Analyst Jonathan Pritchard told Bloomberg.com that Tesco was likely to open 20-30 hypermarkets a year. The retailer currently has 65 supermarkets and six small stores in China.
Tesco’s Asian sales were up 27 per cent in the first half of this year to $7.3billion (£4.4bn).
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