Recently, Luxe.CO was invited to Hong Kong, visiting the “heart” of this renowned global financial center—Landmark, to participate in Hongkong Land‘s most significant project launch in recent years—”Tomorrow’s Central.”
Hongkong Land has always been relatively low-key in the commercial real estate sector, and the high-profile nature of this event highlights the unprecedented scale and importance of this project.
This project aims to create a unique luxury retail experience in Hong Kong, and even globally. Hongkong Land, in collaboration with several luxury brands, will invest over $1 billion (approximately HKD 7.8 billion).
Numerous luxury brands, as strategic tenants of Hongkong Land, have committed to renewing their leases for ten years or even longer. These brands include Cartier, Chanel, Dior, Hermes, Louis Vuitton, Prada, Saint Laurent, Sotheby’s, Tiffany, and Van Cleef & Arpels.
“With the investment from various luxury brands, we might witness the establishment of the largest flagship store of a luxury brand globally in the future,” revealed Alexander Li, Chief Operating Officer of Hongkong Land’s Hong Kong and Macau Commercial Properties, during the event.
The entire project will span three years, with the first phase commencing in the third quarter of 2024.
At the launch event, representatives from Jardine Matheson Group, Hongkong Land, and Landmark shared details of the project, including collaboration stories with luxury brand tenants, member data of Landmark, and the upcoming store formats.
Half a Square Kilometer Will House Flagship Stores of Ten Top Global Luxury Brands
“About two years ago, our luxury brand partners approached us, expressing that Hong Kong remains one of the world’s important cities. They believe in the growth potential of the luxury market here, and Landmark is the most iconic commercial landmark. They wanted more and larger spaces to showcase their brand heritage and provide the best shopping experience for their customers.”
Li recalled the origins of this major investment project during the launch event.
Hongkong Land will create three Maison destinations at Landmark Atrium, Landmark Alexandra, and Landmark Prince’s, each ranging from two to eight stories high, along with another Maison destination at Landmark Chater.
Upon completion, Landmark will host flagship Maison destinations of ten top global luxury brands within a half-square-kilometer area.
After establishing these flagship luxury brand stores, the retail floor area occupied by these major luxury brand tenants at Landmark will double, totaling over 21,000 square meters (approximately 226,000 square feet).
Several existing luxury brand tenants at Landmark have committed to additional investments of about $600 million (approximately HKD 4.7 billion).
The expanded and upgraded luxury brand store spaces will offer personalized and exclusive experiences for Very Important Customers (VICs), including high-end custom clothing, private dining concepts, outdoor terraces, and double-height VIP lounges.
(From left to right) Alexander Li, Chief Retail Officer, Commercial Property, Hong Kong & Macau, Hongkong Land; Michael Smith, Chief Executive, Hongkong Land; Michael Wong, GBS, JP, Deputy Financial Secretary; John Witt, Group Managing Director, Jardine Matheson; and Alvin Kong, Executive Director, Hongkong Land, attend the announcement event.
Michael Smith, CEO of Hongkong Land, specifically mentioned:
“Our strategic tenant partners have signed long-term lease agreements with an average term of ten years, some even longer.
I firmly believe this upgrade project will bring many benefits to our Central property portfolio ecosystem, including numerous office tenants. It will also become one of the best investment projects of the group.
Thanks to our strong financial backing, including robust operating cash flow, even though the investment scale is enormous, it will be completed within three years. Despite a temporary moderate decrease in retail rental income during the upgrade period, we anticipate that this investment will drive tenant sales, leading to stronger retail income growth.”
Discussing this project, some luxury brand tenants shared:
— Robert Calzadilla, President of Louis Vuitton North Asia:
“Louis Vuitton is honored to be part of this visionary project by Hongkong Land. Over the past decades, we have built deep and special relationships with Landmark’s loyal customers, and we look forward to providing them with even more premium experiences in the future.”
— Jean-Baptiste Debains, President of Christian Dior Couture Asia Pacific:
“Dior has been a long-term partner of Hongkong Land since 1995. We have always valued the prime location of our brand at Landmark Atrium. We are eagerly anticipating this ambitious transformation plan at Landmark, hoping to strengthen Landmark’s appeal as one of the world’s top luxury shopping destinations.”
— Julie Clody Medina, President of Van Cleef & Arpels Asia Pacific:
“The vibrant and culturally rich Hong Kong has always been a source of inspiration for us. This city’s uniqueness lies in its reverence for tradition while embracing innovation, aligning perfectly with Van Cleef & Arpels’ philosophy. Hong Kong’s consumers have sophisticated tastes, often open and curious about new creative concepts, creating an ideal environment for our artistic creations.”
— Giulio Brini, President of Prada Asia Pacific:
“Since PRADA Group opened its first store in Asia Pacific at Landmark thirty years ago, Hongkong Land has been an important partner. This not only testifies to our long-term collaboration but also to the group’s strategic presence in luxury destinations. Together with Hongkong Land, we share a common vision to provide our esteemed clients with extraordinary and unique luxury experiences, catering to their ever-changing needs.”
— Maxence Kinget, President of Tiffany Greater China:
“For Tiffany, Landmark has always been a significant international location. We are delighted to be part of Hongkong Land’s transformation plan, looking forward to bringing unforgettable new experiences to Hong Kong customers.”
Why is Landmark Central Hong Kong’s Luxury Destination?
Alvin Kong, Executive Director of Hongkong Land, shared more specific data with us:
“The Central property portfolio in Hong Kong houses over 600 tenants, including international and local companies, business leaders, decision-makers, global luxury retail companies, and unique brands from Hong Kong.
Since its opening in 1980, Landmark has been a global benchmark for luxurious lifestyles, akin to Bond Street in London and Madison Avenue in New York, holding an exceptionally prestigious status.
If we look back, we see that Cartier opened its first boutique in Hong Kong in 1970, Louis Vuitton followed in the early 1980s, and Chanel, Dior, and Prada opened their first stores in 1985, 1991, and 1993 respectively.
Every month, our Central property portfolio sees over 3.5 million visitors, making it a vital part of Hong Kong’s commercial heartbeat.”
Alexander Li, Chief Operating Officer of Hongkong Land’s Hong Kong and Macau Commercial Properties, disclosed the profile of Landmark’s high-end clientele:
“Landmark’s Bespoke membership program highlights the strong growth and loyalty of our consumers. Primarily comprising local residents (80%), we have seen substantial growth potential in these elite customer groups.
For instance, last year, the top 70 customers at Landmark contributed HKD 1 billion in sales. Among our membership program, 80% of Very Important Customers (VICs) spent an average of HKD 1 million per year in 2023. More importantly, our high-end customers show exceptional loyalty, with 85% maintaining or increasing their spending at Landmark each year. It is this support that enabled Landmark to achieve record sales in 2023.”
In addition to the long-term partnerships with luxury brands and recognition from high-end consumers, this renovation will enhance the overall luxury experience in Central, such as:
Landmark currently boasts 16 Michelin-starred restaurants, and plans to introduce more, increasing the total dining space to 260,000 square feet.
In the future, Hongkong Land will collaborate with renowned international auction house Sotheby’s to elevate art appreciation to an immersive experience. Currently, the Sotheby’s space at Landmark Chater is under construction, with a 2,230 square meter flagship gallery set to open in July.
Central’s Revamp Solidifies Its Luxury Retail Brand Effect
On weekdays, the skywalks connecting the towers in Central are always bustling. This ‘heart’ of Hong Kong, a global financial hub, hosts the headquarters of major financial institutions and top global enterprises.
As the world’s first elevated pedestrian walkway system, these skywalks connect Hongkong Land’s twelve Central properties with other landmark buildings, providing great convenience for pedestrians and driving commercial traffic for tenants.
In the “Tomorrow’s Central” project, Hongkong Land will invest over $400 million.
With robust financial strength, the project’s capital expenditure will be spread over three years. As of March 31, 2024, the group’s debt ratio is 16%, with available liquidity (including cash and unused credit facilities) of $3.1 billion (approximately HKD 24.2 billion).
John Witt, CEO of Jardine Matheson Group, welcomed the upgrade project at Landmark, considering it aligns with Jardine Matheson’s vision of co-developing with the community and seizing long-term opportunities, further solidifying Central’s status as a global retail, dining, and business center.
Statement from Jardine Matheson Group CEO John Witt
“Over a century ago, the company’s investments and developments transformed this area from a labyrinth of narrow streets into a spacious waterfront, which later became one of the world’s leading financial centers. Jardine Matheson and Hongkong Land played a crucial role in shaping the Central district we see today.
As one of the largest single owners in Central, this project by Hongkong Land will become a significant milestone in the city’s luxury landscape. It also reflects Jardine Matheson’s long-standing commitment to community development and long-term vision.”
Hongkong Land CEO Michael Smith reminisced about the company’s history in Central:
“After acquiring land from the reclamation project in Central, Hongkong Land had constructed eight buildings by 1906, covering a total area of 60,000 square meters. These buildings became the predecessors of the city landmarks we know today.
At the turn of the century, Hongkong Land undertook four major upgrades to some properties in Central, and in 1980 launched the first phase of Landmark.
Today, Hongkong Land owns and manages over 850,000 square meters of high-quality office and retail assets in major Asian cities, including Beijing, Hong Kong, Singapore, and Jakarta. The Central property portfolio in Hong Kong accounts for 450,000 square meters, serving as a crucial pillar of Hongkong Land.
Based on the strong position of our office and retail property portfolio in the heart of Hong Kong, this strategic investment aims to strengthen our market share in the region and Hong Kong, and to maintain our leadership in the luxury sales sector.”
The Landmark has set a positive precedent for Hongkong Land’s “Central” high-end lifestyle retail brand series.
In the next four years, the group will introduce landmark buildings under the “Central” series in four cities in the Chinese Mainland, increasing the net retail leasable area by 344,000 square meters (approximately 3.7 million square feet).
Besides Landmark, the group’s Shanghai West Bund Financial City project will join the “Global Central” series. Positioned in international cities with significant fashion influence, the “Global Central” projects will lead the development of the international retail market.
Soon, Landmark will celebrate its 45th anniversary. With this renovation project underway, it is poised to remain not only the core of the Central property portfolio but also an enduring center of Central and Hong Kong.
About Hongkong Land
Founded in 1889, Hongkong Land is a member of the Jardine Matheson Group. It is a major listed property investment, management, and development group. The group owns and manages over 850,000 square meters of prime office and retail assets in major Asian cities, including approximately 450,000 square meters in Central, Hong Kong.
About The Landmark
Landmark’s rich history dates back to 1904. Today, it has become the premier fashion shopping destination within Hongkong Land’s Central properties, comprising four iconic buildings: Landmark Atrium, Landmark Alexandra, Landmark Chater, and Landmark Prince’s. These buildings, connected by pedestrian bridges, feature approximately 208 curated boutiques and restaurants, offering high-end fashion and accessories, watches and jewelry, home furnishings, professional beauty services, and gourmet cuisine, providing a delightful and satisfying shopping experience for discerning customers.
| Source: Official press conference transcript and press release
| Image Credit: Hongkong Land
| Editor: LeZhi
