Shui On Land to convert Shanghai hotel into flagship retail store

The conversion of a luxury boutique hotel in a historical district of Shanghai into a multi-storey flagship retail outlet will be the first project to be tackled by China Xintiandi, a commercial property unit to be spun off by Hong Kong-listed Shui On Land.

Shui On owns two hotels in the popular tourist and entertainment area - the 357-room Langham Xintiandi, and the 53-room 88 Xintiandi.

"We plan to convert the smaller 88 Xintiandi into a big retail shop suitable for an international retailer to locate a flagship store," Shui On chairman Vincent Lo Hong-shui said after the group announced its annual result last month. "We expect that after the conversion our rental income will triple."

Shui On reported core profit plunged 87 per cent last year from 2011 to 201 million yuan (HK$250 million), as revenues 43 per cent to 4.82 billion yuan.

The group will continue to operate its 357-room Langham Xintiandi as a hotel.

Raymond Wei, director of retail for East China at DTZ said many global brands were looking for premium locations in Shanghai to establish flagship stores. "Since Xintiandi is a well-established tourist spot with high passenger traffic, retailers will definitely pursue the location for branding effect," he said.