Will Xi’an become the next luxury hub in China?
What happened: Swire Properties announced on March 4 that the fourth iteration of its commercial development series, Taikoo Li, will land in Xi’an. — a world famous former capital and the first city in northwest China with a GDP exceeding one trillion RMB.
The Taikoo Li Xi’an project will be located in Beilin District in the historical and cultural area of Little Wild Goose Pagoda (小雁塔历史文化片区), which was acquired by the real estate group in partnership with a local cultural investment and development enterprise. The total investment for this new program is expected to be around RMB 10 billion, according to the statement from Swire Properties.
An urban regeneration plan will be implemented in the area to blend culture, history, heritage and modern lifestyles. The site will be transformed into a retail-focused project with a low-rise and open architectural design comprising commercial and cultural facilities, a luxury hotel, serviced residences and business apartments.
The Jing plug: Xi’an is one of the emerging Chinese cities that luxury houses cannot afford to overlook. Apart from its cultural heritage, the city’s commercial potential has attracted agile national players. For example, SKP, which topped the nation’s mall revenue rankings, unveiled its second location in the city in 2018. As reported by the Beijing Business DailyXi’an SKP Mall saw 36% revenue growth in 2020, which was even higher than its footprint in Beijing.
With the opening of the Taikoo Li complex, Xi’an is expected to attract more high-end fashion, beauty and lifestyle brands. Distinguished from traditional malls, the Taikoo Li series has built a brand DNA rooted in local culture. His renowned projects in Beijing, Shanghai, Guangzhou and Chengdu have proven his authentic approach to revitalizing traditional regional culture.
However, this is the first time that Swire Properties has bet its Taikoo Li project on an emerging region. Although Xi’an’s business potential is relatively substantial compared to other cities in the Northwest, its consumption has been mainly driven by tourism and travel. Its disposable income per capita in 2021 — recording $6,126 (RMB 38,694) — is much weaker than Chengdu, let alone Tier 1 cities like Beijing and Shanghai. As daily COVID-19 infections reach new highs nationwide, it is uncertain whether Xi’an’s consumption can be sustainably fueled by tourism. Yet Swire Properties has built a cohesive retail brand on the continent and offered unique spaces for luxury homes to engage regional cultures. While the future remains uncertain, their credentials are anything but.
The Jing Plug reports on major news and presents our editorial team’s analysis of the main implications for the luxury industry. In the recurring column, we analyze everything from product declines and mergers to heated debates popping up on Chinese social media.