China’s soaring real estate costs are prompting foreign companies, such as Walmart and Tesco, to buy up land for outlets rather than leasing, according to a report by Bloomberg.
Walmart is currently building its seventh Sam’s Club outlet in the port city of Dalian on the first plot of land it purchased in China. Sam’s Club is a division of Walmart that offers wholesale shopping.
Meanwhile, Tesco has recently formed a US$280m joint venture with HSBC’s Specialist Investments and Metro Holdings to develop three shopping malls in the country.
According to the report, Walmart is increasing its store openings in China and will target development in smaller Chinese cities.
Walmart’s Chinese operations were worth US$7.5bn to the company in its last fiscal year.
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