(Yicai) Jan. 27 -- Ingka Centres' recent co-ownership deal with Chinese investment firm GoHigh Capital for three properties in China allows the Swedish shopping centers operator to unlock new growth capital in the fast-evolving local retail landscape while continuing to operate its "meeting places," according to its global operations manager.

"Investment and divestment are part of the strategy of Ingka Centres, but also very normal in the commercial real estate industry where you develop assets and need, after a certain time, to release capital in order to invest into further growth opportunities," Milen Gentchev said in an exclusive interview with Yicai at the firm's Livat Shanghai shopping mall.

Ingka Centres will link arms with GoHigh to establish a real estate fund that will co-own three of its longest-operating Livat meeting places in Wuxi, Beijing, and Wuhan on Dec. 12, 2025. The Leiden-based firm will maintain ownership and continue to manage and operate all three under the Livat brand, it noted.

"For the first time, we are making such a setup because we think we can achieve two very important goals," Gentchev noted. "On one side, we will continue to own and manage those meeting places, which will continue to provide a strong positive impact for our partners and customers. There will be no disturbance, it will be a continuity of the process. 

"On the other side, any company is looking at the strategies and possibilities to unlock capital, which can be invested into further growth," Gentchev said. "So we are really seeing this as a win-win opportunity to go further with our strategy while at the same time continue to deliver strong value to these three locations."

"Through this strategic initiative, we can ensure sustained local business development and better utilize our accumulated professional capabilities," noted Joyce Zhu, China president of Ingka Centres. "We also see potential new business opportunities this approach could bring in the future."

While the partnership with GoHigh is still subject to the approval procedures of relevant Chinese authorities, Gentchev expressed confidence that the process is "well on track."

Regarding whether other Chinese properties might follow the same model, Gentchev said, "It's too early to make any kind of conclusions. Our focus is to succeed with the current setup.

"Success is built step by step, and we want really to focus," he stressed. "Focusing and concentration are very important in the Chinese market because you cannot throw your efforts and power to too many things."

Ingka Centres Sees China as an Innovation Hub

Beyond financial engineering, China's appeal to Ingka Centres also lies in its role as an innovation hub.

"China is really also an innovation hub for the possibilities which this kind of interaction and blending of the different interactions with the customer in the online and offline world can produce," Gentchev noted.

The Pippi Longstocking campaign at the 10 Livat shopping malls in China, on the occasion of the Swedish character's 80th anniversary and the 75th anniversary of China-Sweden diplomatic relations, had strong customer engagement, Gentchev said. "We can see really the excitement and engagement of the customers at a very high level." 

Recent tenant mix evolution also reflects China's role as a testing ground, with Ingka Centres opening nearly 220 city or regional first-to-market stores last year, accounting for a third of all new tenants. 

"This kind of more emotional, impulsive buying of small items, Labubu toys, and so on, this is really something which the customers prefer to buy in an environment," Gentchev added. "And of course, we respond to this, and therefore we are also introducing all these successful concepts into our meeting places."

The meeting place concept itself represents a deliberate pivot from traditional landlord-tenant relationships, according to Gentchev. "We speak about our tenants as partners because we really involve them and we want to find win-win solutions which are good for them and which are also good for us."

Resilience Amid Market Headwinds

Ingka Centres' tie-up with GoHigh comes as foreign retailers recalibrate their China strategies amid slowing consumer spending and intensifying competition.

The current market dynamics demand strategic focus and differentiation, Gentchev pointed out. "From just expansion, grabbing as much as possible of the opportunities, now it's really the time to look from this moment forward, how I can differentiate, how I can really make a difference, because this will be more and more the key for future success.

"Many people believe that physical retail is dead, but actually, we see it the other way around," Gentchev said. "Our visitation after the pandemic is higher. People have the necessity to come together, to socialize, to interact."

Digital-native brands increasingly seek physical presence for economic and emotional reasons, he pointed out. "Acquiring a new customer might be cheaper to be done physically than in the digital world, and creating an emotional connection might be much, much stronger in a physical environment than in a digital environment."

Ingka Centres achieved a 97 percent occupancy rate across its 10 Chinese properties in the fiscal year 2025, with visitor numbers exceeding 140 million, up 5 percent from the previous year. Beijing Livat saw nearly 260,000 visitors on New Year's Eve, a new record high.

"People vote with their feet, they go to the places which they like, the places which they love, the places which offer them value and more possibilities beyond pure shopping," Gentchev said. "It is a place to belong, something where you can see the purpose and which is really appealing to you."

Ingka Centres has developed 10 Livat meeting places and three office projects in China over the past 16 years, investing over CNY27 billion (USD3.9 billion).

Editor: Martin Kadiev