AMP Capital seeks China malls for slice of growing retail pie

AMP Capital Investors Ltd, with more than A$17.4 billion ($15.3 billion) in property assets, is seeking to partner with Chinese shopping center owners to take advantage of an expanding middle class and transition to a consumer-led economy.

The tie-ups could range from initially providing advisory services to mainland mall developers to ultimately investing in real estate, said Simon Vinson, head of Asian property at AMP Capital. It is also open to acquiring or partnering with companies with interests in Chinese retail assets, he said.

"The China retail sector is a very attractive long-term investment play for global institutional clients," Vinson said on Thursday in an interview in Sydney. "We see opportunities to acquire nonperforming assets in good locations, good catchment areas, with good access to public transport facilities and limited effective competition."

China accounted for 73 percent of commercial property investments in Asia in the first half of 2014, according to a Sept 18 report by broker Cushman & Wakefield Inc. Cities across greater China are the most attractive Asia-Pacific region locations for international retailers, Jones Lang LaSalle Inc said in June. Retail sales in the world's second-largest economy will rise at least 12 percent in each of the next three years, according to economists surveyed by Bloomberg News.

AMP Capital had last year said it would partner with China Life Insurance Co, the nation's largest insurer, to set up a fund management company targeting Chinese investors.

The joint venture started off investing in domestic listed equities and fixed income, it said in a statement at the time.

The asset manager now owns and operates properties in Australia, New Zealand, Singapore, the United States, France and Italy.

AMP Capital has been seeking to establish a foothold in the mainland property market for the past two to three years, Vinson said. The company provided advisory services to one of China's largest shopping center owners from the fourth quarter of 2013 to the third quarter of this year, he said, declining to identify the company.

"The relationship was quite symbiotic," Vinson said. "We were bringing our strategic skills in retail design, masterplanning, precinct planning and the operational detail of running shopping centers."

Many local developers, which may not have much retail knowledge, build mixed-use projects that include malls, Vinson said. That is where AMP Capital, with decades of experience developing shopping centers, sees openings for joint ventures, he said. The firm sees more opportunities for partnerships, which would allow AMP Capital to better understand the local market and precede any capital investment, he said.

"China is a key market for AMP Capital, but it's a matter of being persistent and resilient," Vinson said. "There's a long learning curve so I don't have any preconceived ideas when something will be successful."