Beijing Hualian Group Discusses Sale of Luxury Shopping Center to Boyu Capital

Rumors have been circulating in the market that Beijing Hualian Group Investment Holding Co., Ltd. is in advanced discussions to sell its operations and development division of its luxury shopping center in China to private equity firm Boyu Capital. The potential sale involves Beijing Hualian SKP Department Store Co., Ltd., which is responsible for managing and operating the high-end retail properties of Hualian SKP. This has sparked widespread speculation about a potential change in ownership of SKP.

The majority shareholder of Beijing Hualian (SKP) Department Store Co., Ltd. is Radish Fashion (Beijing) Commercial Co., Ltd., which holds 50% of the shares. The actual controller is a Singaporean company, Radiance Investment Holdings PTE, which owns 100% of Radish Fashion Commercial and an additional 10% stake, totaling 60% ownership of Beijing Hualian (SKP) Department Store Co., Ltd.

Beijing Hualian Group's stake in Beijing Hualian (SKP) Department Store Co., Ltd. is 40%, with 4 million shares. This stake has been frozen by the court due to civil litigation, with the freeze period starting from March 28, 2023, to March 27, 2028. The timing of the sale rumors coincides with the court's decision to freeze the shares, adding to the intrigue surrounding the potential transaction.

Beijing Hualian Group Investment Holding Co., Ltd. faces significant risks, with 89 internal risks, including 11 legal disputes, 1 regulatory measure, and 77 operational risks. Related risks amount to 303, indicating a high level of financial and operational challenges for the company.

Market rumors suggest that the sale being discussed between Beijing Hualian Group and Boyu Capital may also include the physical assets of Hualian SKP's shopping malls, currently located in Beijing, Xi'an, Chengdu, and Wuhan. The fifth SKP mall, located in Hangzhou, is still under construction. The estimated value of the entire SKP business is between 40 billion and 50 billion USD, highlighting the significant scale and potential value of the transaction.

Beijing SKP has been a dominant player in the retail sector for the past decade, holding the title of the nation's top-selling mall. In 2023, Beijing SKP's sales reached 26.5 billion CNY, but in 2024, sales dropped to around 22 billion CNY, losing its top position to Nanjing Deji Plaza. This decline in performance may have contributed to the decision to explore a potential sale of the business.