Tesco looks East for growth and plans new Chinese stores

TESCO yesterday announced a &pound;100m tie-up with Asian investors to build three shopping centres in China as the first stage of a larger building programme.<br /><br />Britain&rsquo;s biggest supermarket has signed an agreement for a 50-50 venture with investors including HSBC Nan Fung China Real Estate Fund, Singapore&rsquo;s Metro Holdings and Hong Kong&rsquo;s Nan Fung Group.<br /><br />This joint venture will comprise three shopping malls in Anshan, Fushan and Qinhuangdao, each of which includes a Tesco hypermarket as the anchor tenant. Two of these &ndash; Anshan and Fushan &ndash; are mixed-use developments including retail, entertainment and residential properties.<br /><br />Tesco currently operates 65 hypermarkets and six small stores in China, comprising approximately 6m sq ft of space and generating &pound;417m sales in the six months to 29 August 2009.<br /><br />As part of a long-term strategy for substantial investment in China, it will open 18 new hypermarkets in the 12 months up to February 2010.<br /><br />A Tesco spokesman said: &ldquo;We&rsquo;re applying the experience we&rsquo;ve gained in other markets to develop the shopping centre model, which we think will be profitable. We have been looking to work with other investors.&rdquo;<br /><br />HSBC advised on the deal, which will see Tesco competing further in China with other international retail brands such as France&rsquo;s Carrefour, Germany&rsquo;s Metro and the US retailer Walmart. <br /><br />&bull; Apple, the maker of the enormously popular iPhone, also said it would open two stores in Shanghai.