In Case You Missed It…Week In Review October 20-24

on October 25 2014 | in Week in Review | by | with No Comments

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This week in the news, Chinese students are driving tax-free spending in the UK, Bulgari will open a hotel in Beijing, CBRE’s new report reveals the key to investing in the Chinese retail market, Versace’s China growth remains robust, and wealthy Chinese are drawn to Europe through “golden visas.”

Students Drive Surge in Chinese Tourist Spending in the UK

Students from China and Hong Kong are spurring London’s economy. According to Global Blue, tax-free spending by customers from those countries rose 10 percent year-on-year in September, reports Women’s Wear Daily. This was the highest increase in spending by Chinese and Hong Kong customers in the past six months. The spending growth was attributed to the families of students from Hong Kong and China coming to the UK to help their children settle in at British schools and universities. According to the UK’s University and College Admissions Service, the number of international students admitted to British universities in 2014 rose 7 percent. Chinese made up 26 percent of those international students.

Bulgari Selects Beijing for Fifth Luxury Hotel

To promote its luxury brand, Bulgari is expanding its hotel business and has announced the location of its second hotel in China. The opening of its first China hotel, the Bulgari Hotel Shanghai, is slated for 2016. In spring of 2017, Bulgari will open a Beijing hotel in the exclusive Embassy District, near the trendy Sanlitun neighborhood. The Bulgari Hotel Beijing will be part of the new Genesis Beijing project that will include two office towers and a contemporary museum, according to the company. The 120-room hotel will overlook the Liangma River and the interiors will be designed by Italian architectural firm Antonio Citterio Patricia Viel and Partners in the contemporary Italian style which characterizes all the Bulgari Hotels and Resorts.

China Retail: Shanghai and Beijing Shine While Caution Looms Over Shenyang

CBRE’s recent report, MarketScore: the Key to Investing in the China Retail Market, provides a framework to evaluate China’s “notoriously opaque” retail market using 11 macro and retail-specific indicators. Based on the study, Shanghai, Beijing and Hangzhou currently offer the brightest prospects for retail investment. However, China’s second-tier cities such as Shenyang and Wuxi have high oversupply risk. According to CBRE, some of the new retail projects in these two cities have a vacancy rate of as high as 40 percent. Consumption patterns of Chinese shoppers in tier 1 cities vary. Beijing shoppers spend a larger share on clothing, about 11 percent of their consumption expenditures, and less on food consumption than the other tier 1 cities.

Versace’s China Growth Remains Robust

No brand is immune to the luxury slowdown in China, but Versace is still on pace for double-digit growth this year. Company CEO Gian Giacamo Ferraris, who was in Hong Kong recently for the opening of its new 720 square meter Asian flagship store in Hong Kong’s Harbour City mall, said of the company’s growth in China, “If you’re saying it was 38 percent growth and now it’s not, then yes, we are affected. But China is becoming about organic growth, it is something that is capitalising. Before [growth] was investing in new shops, and now … the growth is coming organically, which is more profitable.” Ferraris has almost doubled sales since his arrival in 2009, and sales surged by almost 33 percent in 2013. While sales were below expectations this year, the company is generating more sales from its existing stores.

‘Golden Visas’ Are Drawing China’s Wealthy to Europe

While China is on the road to prosperity, some wealthy Chinese are hedging their bets and eyeing residency abroad. Many EU countries, especially those suffering from economic recession, are offering residency permits to people outside of Europe. If someone puts down several hundred thousand euros on an apartment or house, they gain the right to live in a EU country and can travel freely among the other 25 countries in the union. These schemes often provide home buyers with a smoother road to permanent residence in the country as well. Popular countries among Chinese buyers are Cyprus, Latvia, Hungary, Greece, and Spain, but Portugal runs the most successful visa scheme to date in which Chinese are by far the biggest buyers.



image credit: economist.com

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