Hang Lung-built shopping center Plaza 66 is located on Nanjing Xi Lu, named as one of the "10 most famous commercial streets in China" by the China Commercial Walking Street Committee. Image credit: Hang Lung Properties
French luxury conglomerate LVMH Moët Hennessy Louis Vuitton is partnering with Chinese developer and manager Hang Lung Properties on a three-year climate and sustainability pact in retail real estate in Hong Kong and mainland China.
The collaboration will initially cover 26 LVMH brands occupying more than 90 retail spaces in total rentable area of 27,000 square meters across Hang Lung’s portfolio of shopping centers and commercial properties in seven cities in mainland China.
"The design of our stores, like that of our products, is inspired by LVMH's core values of creativity, innovation and excellence,” said Antoine Arnault, who runs LVMH Image and Environment, in a statement from Paris. “This, of course, means guaranteeing the environmental performance of our over 5,550 stores around the world.
“We are, thus, delighted with the unprecedented scope of this agreement with Hang Lung Properties,” he said. “Our collaboration will allow us to expand our environmental commitments, especially with regards to climate."
The initiative offers a new take on the relationship between property owners and retail brands on consumer-sensitive issues such as sustainability, especially in a non-Western market.
Green back
China is the biggest revenue generator for LVMH among all global markets, as it is with its competitors Kering, Hermès, Chanel and Richemont. LVMH brands such as Louis Vuitton, Dior, Bulgari and Tiffany have a major retail footprint in malls across China.
Based in Hong Kong, Hang Lung Properties develops and manages retail, commercial, residential and hotel real estate in its hometown as well as the nine mainland cities of Shanghai, Shenyang, Jinan, Wuxi, Tianjin, Dalian, Kunming, Wuhan and Hangzhou.
The Chinese company positions its luxury retail real estate under the "66" brand.
LVMH, whose 56 brands make it the largest luxury conglomerate worldwide, will work with Hang Lung in five key areas: climate resilience, resource management, events, progress reviews and wellbeing, sustainable transactions and sustainability communication.
Both organizations will work with employees and suppliers on this sustainability effort.
The first major event under the partnership is a Real Estate & Climate Forum Nov. 24-25. The forum’s agenda and speakers will focus on idea generation for action in 12 areas, including energy efficiency, circularity and social impact.
THE PARTNERSHIP will be renewable after it expires at the end of 2025.
“Although Hang Lung already has ambitious ESG goals and targets, the partnership with LVMH takes our sustainability agenda to the next level, demonstrating how landlords and tenants can work creatively together for the greater good,” said Adriel Chan, Hang Lung Properties vice chair and chair of the sustainability steering committee, in a statement.
“We are confident that the partnership will make a positive impact in support of China's goals to peak its carbon emissions by 2030 and to reach carbon neutrality by 2060,” he said.
“I have always held that one of the great things about sustainability is that it is a positive-sum game. To this point, Hang Lung and LVMH have made explicit in our agreement that we encourage one another to work with other tenants and other landlords to further the sustainability agenda, and so we welcome the proliferation of these types of agreements going forward."