Why a 10+ year-old shopping mall in Kunshan is valued at 1.5 billion yuan?
In June 2026, China Merchants Asset Management China Merchants Shekou Commercial Real Estate REITs officially submitted its application to the stock exchange, planning to include Kunshan China Merchants Garden City and Shenzhen Prince Plaza as underlying assets. This article focuses on the Kunshan China Merchants Garden City of the commercial retail type — this shopping mall, which has been in operation for over ten years, is being pushed to the capital market, and the market needs to independently examine and answer one question: How much is it worth?
Based on data and on-site investigations, the Winshang Research Center attempts to answer a more specific question: What kind of asset is Kunshan China Merchants Garden City exactly? What position does it occupy in Kunshan's commercial landscape, what pressures does it face, and how is it priced? More critically, for investors, how should they establish a cognitive framework for this type of asset?
We start our discussion with the city of Kunshan.
01.
Kunshan's Commercial Scene Is Rich and Unique
Established Players Are Strong, While Newcomers Are Aggressive
Kunshan, China's strongest county-level city and an important member of the Shanghai Metropolitan Area, boasts a rich and unique commercial foundation, on which the Winshang Research Center has previously conducted in-depth investigations.
Robust economic development and a complete industrial system have nurtured a large number of high-net-worth consumer groups during the rapid urbanization process;
Based on the manufacturing industry, the urban spatial pattern tends to prioritize industrial bases such as factories, and the plots connected to these factories form the boundaries for commercial expansion;
High-level consumption has attracted a sufficient number of chain-operated enterprises, leading to rapid commercial iteration and fierce competition;
Cross-district rail transit expands the customer base, connecting Shanghai and Suzhou, aligning consumers' fashion sensibilities and commercial demands with those in first- and second-tier cities.
The consumption power in Kunshan's urban area can even match that of Suzhou's downtown area. For this reason, this place is a "must-compete territory" for chain commercial management enterprises, where heavyweights including China Resources Mixc, China Merchants Commercial Management, Zhuhai Wanda, Wuyue Commercial, Golden Eagle Retail, Tianhong, and Zhongjun Commercial Management compete head-to-head.
From the perspective of the framework and context of urban development, Kunshan administers 10 towns. However, local residents do not refer to them by their town names, but by their urban orientations, calling them "the city center, east of the city, south of the city, and north of the city". The city center was the earliest downtown area, while the north, east, west, and south parts of the city developed simultaneously, with the main framework of "residences to the west, industries to the east", and the west part of the city has the best urban interface.
Currently, Kunshan Golden Eagle International Shopping Center and Kunshan Mixc, the two strongest competitors of China Merchants Garden City, are located in the city center and the west part of the city respectively. The former is the largest shopping mall in Kunshan, featuring a comprehensive portfolio of high-end cosmetics brands and light luxury brands. The opening of the Aldi supermarket in 2025 further expanded the project's coverage of young people and young family customers.
Kunshan Mixc, which opened on November 2, 2019, is the first shopping mall built by China Resources Mixc Life in a county-level city, focusing on the concentrated settlement of mid-to-high-end consumer brands and the continuous introduction of new first-store brands. Since its opening, Kunshan Mixc has been the leading player in Kunshan's commercial sector, taking the lead in all aspects including location, positioning, products, formats, and brands.
The north part of the city, where Kunshan China Merchants Garden City is located, is a mature old urban area of Kunshan with a dense population and complete supporting facilities. However, its urban interface and customer group quality are not as good as the emerging west part of the city. Even so, the competitive landscape of urban commerce is always changing.
For Kunshan, there are two key variables: First, rail transit redistributes passenger flow; second, newly launched projects re-divide market share.
Rail Transit Redistributes Passenger Flow, High-Quality First Stores and Big Brands Favor TOD Malls
On June 24, 2023, Suzhou Rail Transit Line 11 opened for trial operation. This line, jokingly referred to as "Kunshan Metro Line 1", connects Suzhou Rail Transit and Shanghai Metro, marking an important milestone in the integrated development of the Yangtze River Delta. At present, Kunshan TOD commercial projects Kunshan Mixc and Kunshan Huaqiao Zhongjun World City are the two malls with the largest passenger flow in Kunshan.
According to the passenger flow monitoring data from Winshang Big Data, before and after the opening of Line 11, there was a significant difference in the passenger flow growth rate between Kunshan's metro-connected projects and non-metro-connected projects. Without metro connections, Kunshan China Merchants Garden City is less competitive in attracting customers via transportation than Kunshan Mixc and Kunshan Huaqiao Zhongjun World City.
In addition, before the iteration of the competitive landscape, China Merchants Garden City and Golden Eagle International Shopping Center were the core carriers of Kunshan's first-store economy. However, with the change of the rail transit network, high-quality first-store resources and high-end brand resources in Kunshan are now fully tilting towards new metro TOD projects.
Newcomers Redivide the Market Cake, Zhongjun and Aeon Are Coming Strong
In terms of newly launched projects, Zhongjun Huaqiao World City, which opened on October 1, 2024, features seamless connections to two metro lines, allowing Shanghai-Suzhou commuters to "reach the mall as soon as they exit the station", becoming a "new consumption choice around Shanghai" and even attracting Shanghai customers to shop in reverse. During the trial operation period, it showed impressive performance with 600,000 passenger visits and sales exceeding 50 million yuan. On the official opening day, it set a record of 250,000 passenger visits and 15 million yuan in single-day sales. According to Winshang Big Data, its passenger flow ranks second in Kunshan, only behind Kunshan Mixc; its sales volume has risen rapidly, exceeding the expectations of local retail commercial practitioners in Kunshan.
In addition, Kunshan Aeon Mall, located in Kunshan's commercial "lowland", is scheduled to open in 2027. The project is located in the Olympic Sports Center block of the Development Zone in the east part of Kunshan, with a total floor area of about 180,000 square meters. It integrates a shopping mall, open blocks, and a sunken plaza, creating a brand-new Aeon Mall concept that evolves from "Shopping Mall" to "Living Place".
Avoiding head-on competition in mature business districts and seizing commercial lowlands is exactly the entry point that Aeon is best at. At present, although the Shimao Plaza in its location has a certain level of popularity, there is still a considerable gap between its commercial environment and brand level and the consumption expectations of surrounding residents. Taking this as an anchor point, Kunshan Aeon Mall is full of "down-to-earth" genes — instead of pursuing high-end luxury, it aims to create a place where family customers are willing to visit frequently and stay for a long time.
For China Merchants Garden City, the external environment is always dynamically changing — Mixc intercepts mid-to-high-end consumption, Zhongjun World City rises rapidly with its TOD advantages, and Aeon Mall is about to fill the gap in the east part of the city. Every variable is redefining the rules of competition.
Against this backdrop, the breakout strategy of China Merchants Garden City must focus on the asset's inherent foundation and exclusive advantages — such as location conditions, customer base, operating status, stock space, and growth ceiling, which determine what it can hold onto, strive for, and change amid the changing landscape.
02.
A "Ten-Year Veteran" in the North Part of Kunshan
The Inherent Foundation of China Merchants Garden City's Assets
Kunshan China Merchants Garden City is located in the core main urban area within Kunshan's Central Ring Road, in the southern part of the North City Business District, adjacent to the old urban area, and situated in Kunshan's core commercial hinterland. The project was formerly known as Jiufang City, which was acquired and renamed by China Merchants Shekou, and officially opened in October 2015, maintaining stable operation for over ten years to date.
According to the prospectus, the project believes it has multiple advantages over competing properties in terms of brands, location, transportation, and customer groups, including:
Having deeply cultivated the North City Business District for a long time, it serves high-quality surrounding communities and business people, enjoying a high penetration rate; located in the center of the north part of the city, it has a developed road network and superior transportation conditions in the surrounding area, giving it advantages in attracting customers and radiating influence; relying on the concentrated commercial product line of "China Merchants Garden City", it has accumulated high brand awareness and market influence; having carried out member operations for more than ten years, its member consumption has high stickiness, and it has built a benign consumption ecosystem with high-frequency repeat purchases.
Customer Profile: Solid Basic Disk with a Large Number of Permanent Residents in the Vicinity
According to the prospectus, the main customer groups of Kunshan China Merchants Garden City are young people aged 20-35 and "little sun" family customers (that is, three-person families in the early stage of raising children, with children at preschool age), and the secondary main customer groups are middle-aged people aged 35-45 and "big sun" family customers (that is, mature families with children at school age), with a small number of tourist customers and business office customers.
It is also reported that the compound annual growth rate of Kunshan China Merchants Garden City's passenger flow in the past five years is 8.8%, and the growth rate in 2025 is 4.3%. The growth mainly benefits from its core customer group positioning and relatively broad customer coverage.
After ten years of deep cultivation and operation, China Merchants Garden City has deeply bound the surrounding rigid local customer groups, forming mature and stable consumption awareness and habits. Focusing on core customer groups, Kunshan China Merchants Garden City has created a core commercial portfolio consisting of rich formats such as retail, catering, daily-life supporting services, and leisure entertainment, providing consumers with an all-round, one-stop shopping and play experience.
On the one hand, it introduced the first Hema Fresh supermarket in the north part of the city to strengthen the stickiness of core customer groups; on the other hand, it increased investment in the experience-oriented consumption track, continuously promoted the introduction of first stores and the renewal of brand images, successively launching characteristic brands such as Zheng Agong's first Suzhou store, Shuxia's first Kunshan store, and Liu Zhenzhen's first Kunshan store, and iterating the latest image stores of brands including UR and MLB, accurately covering both parent-child families and young trend-setting customer groups.
It is reported that in the past five years, the number of members of Kunshan China Merchants Garden City has increased from 420,000 in 2021 to 730,000 in 2025, accounting for about 34.0% of Kunshan's permanent resident population, with an average annual compound growth rate of 15.0%. Along with the rapid increase in the number of members, member stickiness has steadily improved, and the proportion of member consumption has gradually increased from 24.0% in 2021 to 36.0% in 2025, reflecting the widespread recognition of Kunshan China Merchants Garden City among consumers.
Revenue: Both Rent and Occupancy Rate Decline, Tenant Structure Needs Optimization
According to the data disclosed in the prospectus, Kunshan China Merchants Garden City has experienced a "double decline" in both unit rent and occupancy rate in recent years.
In addition, the Net Operating Income (NOI) has also fluctuated.
In terms of tenant structure, as of March 31, 2026, Kunshan China Merchants Garden City has a total of 253 signed tenants, including 8 anchor stores and 245 specialty store tenants.
From the perspective of format structure, both Kunshan China Merchants Garden City and Kunshan Mixc take retail and catering as their two core formats, but in contrast, Kunshan Mixc, which is positioned at a higher end, generates higher revenue from its retail format.
From a longitudinal perspective, China Merchants Garden City has continuously increased the area of leisure and entertainment formats and strengthened the concentration of retail formats in recent years. Overall, the direction of format adjustment is clear.
As the stock asset with the longest operating life in Kunshan's leading business district, China Merchants Garden City had leases with year-on-year rent increases in the early stage, resulting in a high rent base and greater pressure on brand operating costs, which has led to high-quality brands continuously shifting to emerging metro-connected projects.
However, the project has currently carried out active and diversified operational adjustments. According to the investigation, the project continues to promote format iteration. The original double-layer H&M fast-fashion anchor store is planned to officially close at the end of June, and the original double-layer space will be upgraded to a new format combination of Huawei Automotive Experience Store and Super Miniso, getting rid of its dependence on traditional fast fashion, effectively improving the quality of in-mall formats and the upper limit of floor efficiency.
Conservative Pricing: Valued at 1.529 Billion Yuan, With an Above-Medium Distribution Rate
Operational analysis focuses on "how well it performs", while valuation analysis focuses on "whether it is worth the price".
When Kunshan China Merchants Garden City is packaged into a public offering REIT, the market needs to re-evaluate its value with a unified pricing language — discount rate, capitalization rate, and distribution rate. Behind each parameter is the collective judgment on the project's future cash flow and growth potential.
Based on the data disclosed in the prospectus, Kunshan China Merchants Garden City presents the characteristics of conservative pricing and an above-medium distribution rate.
In terms of valuation, the overall valuation of the project is 1.529 billion yuan, with an appraisal appreciation rate of 4.98%, which is basically in line with the book value, indicating conservative pricing; the valuation per leasable square meter is 25,000 yuan, significantly lower than the 39,000 yuan per square meter of Kunshan Mixc.
In terms of pricing logic, the capitalization rate of Kunshan China Merchants Garden City in 2027 is 6.18%, higher than the 5.96% of Kunshan Mixc in 2026.
