Lan Kwai Fong Holdings Ltd., the developer of Hong Kong’s iconic stretch of bars and restaurants, will expand into Wuxi, China, as the nation’s growing middle class demands more entertainment choices.
The developer signed a memorandum of understanding with the city government yesterday to jointly build a 140,000 square meter (1.5 million square feet) retail and restaurant complex, Chairman Allan Zeman said in a phone interview. The project will be the Hong Kong-based company’s third in mainland China.
Lan Kwai Fong is seeking to expand in so-called second-tier cities in the country, where per-capita disposable income for urban households almost doubled in the last six years. The company, which has properties in Chengdu and Hainan Island, is also in talks to develop projects in cities including Qingdao, Ningbo and Chongqing, Zeman said.
“Those in the second-tier cities have money and cars, but they also want to enjoy their lifestyle,” said Zeman, 64. “If you look at cities like Qingdao, when we go for dinner with the government officials, they ask if we actually want to go out; but there’s no place to go.”
Zeman declined to say how much the company will invest in the Wuxi project. The project will have 40,000 square meters of bars and restaurants, 60,000 square meters of shops and 40,000 square meters of hotels and serviced apartments, he said.
Hong Kong’s Lan Kwai Fong, in the center of the former British colony’s central business district, has more than 100 restaurants and bars, not all controlled by the company. Zeman said in December the company plans to raise as much as $800 million to fund its China expansion and may consider a public offering.
The original Lan Kwai Fong in Hong Kong started in the 1980s with a restaurant that served hamburgers, according to the company’s website. The stretch is now an after-work hangout for white-collar workers.
A two-year redevelopment plan, which includes adding a 28-story building with terraces on every floor for smokers, who are banned from lighting up indoors, is scheduled to be completed by 2013, Zeman said in a January interview.