Global Power
Oct 1, 2007 12:00 PM, Elaine Misonzhnik
International real estate services giant Jones Lang LaSalle, Inc. plans to expand its operations in China, with one of the company's senior executives in the Asia Pacific claiming the firm is already in talks with a local player to form a 50-50 joint venture for shopping center management.
On Sept. 12, managing director and head of Jones Lang LaSalle's Chinese retail division David Hand told Reuters that the company expects to announce the new partnership by the end of the year. Hand declined to reveal the name of Jones Lang's potential local partner and a spokesperson for Jones Lang LaSalle declined to comment further until “if and when the deal is announced.”
If the partnership goes through, Jones Lang LaSalle stands to become the largest shopping center manager in Asia. The firm already operates 60 offices in 13 countries in the Asia Pacific, including 21 offices in China.
This emphasis on international growth will serve Jones Lang LaSalle well in coming years, analysts say, as its clients deal with issues of globalization. “Companies like Jones Lang can be a single source for all their real estate needs,” writes Morningstar analyst Heather Smith.
Moreover, China, with its large population and skyrocketing GDP (which grew by 11.1 percent last year), continues to be one of the more attractive countries in the world in which to invest.
It possesses the necessary consumer power, but its mall developers still lack management savvy, compared to their Western counterparts. Many of the large malls in China are not centrally managed (instead operating as large retail condos) meaning that even getting simple things fixed, like burned-out light bulbs, can be a problem.
Jones Lang LaSalle, meanwhile, offers considerable experience in property management, with 675 million square feet of office, retail, mixed-use and industrial space in its global management portfolio.
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