Shenzhen shopkeepers cry foul over Li Ka-shing mall
Shopping mall tenants protest in Hong Kong over 'empty promises' by developer Hutchison Whampoa
UPDATE: If you build it, they will come, so the saying goes. Well, they built it, but the shoppers didn’t come.
Dozens of angry shopkeepers from the Century Place shopping mall in the southern Chinese city of Shenzhen demonstrated on Thursday outside the main offices of the project’s developer, Hong Kong’s CK Hutchison Holdings.
They claimed that they have been cheated by the company, as the shopping mall has failed to attract customers. Some of the shop owners said they have been sued by the developer when they could not afford to pay rent.
Hutchison Whampoa built the mall before the company was taken over by CK Hutchison Holdings, both controlled by Li Ka-shing, one of Asia’s richest tycoons who goes by the nickname Superman.
“We are so sad,” one of the demonstrators said. “They cheated us.”
Opened in 2014, Century Place is a seven-storey mall located in Shenzhen’s Futian district. It occupies a total gross floor area of about 59,000 square meters, according to the company. “The development offers a myriad international and local apparel labels as well as a variety of cuisines to best serve distinguished customers,” it said.
Shopkeepers demonstrating in Hong Kong disagree.
A report in Shenzhen newspaper Jing Bao said the developer had promised shopkeepers an occupancy rate of 70%. Today, the rate is only 30%, it said.
A female restaurant owner said she had lost five million yuan since she opened her business in 2014. She told the newspaper she paid 500,000 yuan in rent per month, and had income of only 300,000 yuan.
Mr Lin, who ran a shop selling famous brand watches, said he had lost one million yuan before closing down last year. He said the developer had sued him when he couldn’t afford to pay rent.
The demonstrators in Hong Kong say they represent 129 mall shopkeepers who have “invested tens of millions” of yuan in their businesses.
Details or financial numbers regarding the case could not be confirmed by the reporter. But locals in Shenzhen verify that the shopping mall generally is empty.
“I go there sometimes for a coffee, just because it’s so quiet,” one Shenzhen hotel operator said.
China’s massive shopping mall building spree, and flood of new department stores, has led to strong competition among domestic shopping centers. The credit boom of post-financial crisis stimulus has also resulted in a proliferation of empty commercial developments and apartments built on rampant speculation.
With a rapid move toward e-commerce, shopping malls face even tougher competition. This year, Alibaba’s annual Singles’ Day rang up an eye-popping US$17.8 billion in sales, 25% more than last year. (That’s more than Brazil’s estimated total e-shopping for this year).
Last year Hutchison Whampoa merged with the Cheung Kong Group, also controlled by Li. The combined business was renamed CK Hutchison Holdings Limited.
Representatives for Shenzhen Hutchison Whampoa told Asia Times in a written statement that the claims by the demonstrators are “false” and that the shopkeepers actions “have adversely affected the operations of Cheung Kong Center and caused inconvenience to the public.”
“The Company reserves the right to take any appropriate legal action to protect itself against these false allegations, as well as the legal rights of the Cheung Kong Center tenants and the public,” the statement read.
To resolve to the lease disagreements, the company resorted to take litigation, the statement said. It added that the Shenzhen Court of Justice recently rendered verdicts of the cases, ruling that the outstanding payments of rent and service charges be duly made.
It said that since the opening of Century Place in August 2014, the company has held a number of publicity and sales promotion activities as well as upgrading the trade mix in order to attract more customers. It explained that the number of new shops is increasing, including famous sports and cosmetic brands.