SHANGHAI — Hong Kong real estate giant Swire Properties has inked an agreement with China Tourism Group Duty Free Corporation Ltd., the world’s largest duty-free operator, to develop a luxury retail project in Sanya, China‘s resort town in the southern Chinese province of Hainan.
The 50-50 venture has acquired a government land listing-for-sale project for 1.31 billion renminbi, or $182.2 million. Located at Haitang Bay National Coastal Recreation Park, the 2.1 million-square-foot project will become Swire Properties’ eighth large-scale commercial development in mainland China.
The resort-style premium retail development will be completed in phases from 2024.
“The design will embrace Sanya’s tropical coastline and unique ecological landscape, whilst taking inspiration from the traditional fishing settlements of the Indigenous Dan community,” said Han Zhi, director, retail at Swire Properties.
“With the 22-kilometer coastline along Haitang Bay as a backdrop, we intend to curate a unique experience featuring premium retail with arts and cultural elements to create a major luxury travel destination in Hainan,” Zhi added.
The new project will become the third segment of CTG Duty Free’s Sanya International Duty-Free Complex. A network of bridges will connect it to phases I and II of the project, which opened in 2014 and 2020, respectively.
Buoyed by mainland shoppers unable to travel abroad and favorable tax policies, Hainan’s duty-free sales skyrocketed 84 percent to 60.17 billion renminbi, or $8.3 billion, in 2021.
During the recent 20th Communist Party Congress that closed last week, Chinese President Xi Jinping called for accelerated development of the Hainan Free Trade Port and the strengthening of consumption to drive economic growth.
Established in 2020, the Hainan Free Trade Port aims to transform the southern province of Hainan into a tourism, retail, medical, technology and manufacturing hub. The plan boosted duty-free spending allowance to 100,000 renminbi, or $13,915, the world’s most generous offshore duty-free spending cap.
According to data released during the annual session of the Hainan Provincial People’s Congress in January, Hainan province has set a 100 billion renminbi, or $13.9 billion, sales target for 2022, a 66 percent increase from 2021. By 2025, Hainan aims to become the world’s largest duty-free consumer market.
The island’s retail market took a hit from a 40-day COVID-19 lockdown that started in early August, but sales picked up gradually after lockdown bans were lifted.
According to data released by the Hainan Provincial Commerce Department, for the first three days of the National Day holiday, from Sept. 30 to Oct. 2, sales reached 630 million renminbi, or $87 million, with more than 150,000 shoppers visiting stores.