Wal-Mart Stores (WMT.NYSE) and the Ikea Group are leading foreign retailers in a push to buy up land in China to develop stores and thus escape climbing prices, Bloomberg reported. Wal-Mart Stores, the world’s largest retailer, bought sites in Dalian last year, while Inter Ikea Centre Group, a property developer owned in part by Ikea, invested US$1.2 billion in 510,000 square-meter’s worth of mall space to expand Ikea’s home-furnishings retail footprint. Foreign retailers are turning to buying property, even in the midst of historically high prices, in reaction to even more rapid increases in retail rental prices. Investment in commercial real estate exploded in China last year, up 42% year-on-year. “The economics of doing retail development look very attractive now if you can get the land,” said Michael Klibaner, head of China research at Jones Lang LaSalle.
China Economic Review