The "Louis" docked in Shanghai, Swire bets heavily on the mainland

Author | Chai Xuchen

Editor | Zhou Zhiyu

The Louis Vuitton giant ship has "sailed into" the bustling Nanjing West Road business district in Shanghai, backed by Swire Properties making a significant bet on the mainland, stepping towards "global top retail destinations."

On June 26, LV's new conceptual landmark "Louis" officially opened to the public. This fashion giant ship is located in the Xinyi Swire City in downtown Shanghai. It is also the third global art landmark inspired by LV's hard case, following Paris and New York.

According to reports, "Louis" has a total area of 1,600 square meters and is a composite concept space that integrates exhibitions, dining, and retail. The first and second floors host the new Louis Vuitton exhibition "Extraordinary Journey," the second floor features a cultural and creative specialty store, and the third floor houses the Louis Vuitton café, combining "coffee + exhibition + cultural creativity."

Swire Properties revealed to Wall Street News that the design inspiration for "Louis" comes from the history of LV creating hard cases for transoceanic journeys in the 19th century, representing Shanghai's port culture as the "Eastern Gateway." It is also another conceptual space established in the Nanjing West Road business district following the Prada Rongzhai and Zhangyuan Dior boutique.

The second-floor exhibition hall of "Louis" displays 19th-century maritime hard case artifacts, while the café on the third floor features floor-to-ceiling windows reflecting the bustling street scene of Wujiang Road—this "cultural narrative + immersive consumption" model precisely hits the emotional appeal of the Generation Z customer base.

Last year, cases such as Moncler's flagship store sales surging by 40% after a major show and the Doraemon special exhibition driving a 50% increase in weekend foot traffic at Kerry Center confirmed the transformative magic of experiential consumption.

Swire has keenly captured this trend, embedding "scene empowerment" into its operational DNA: from the Sichuan courtyard in Chengdu Taikoo Li to the LV travel home space in Zhangyuan Shikumen, and now to the maritime theme of "Louis," all enhance brand premium through local cultural integration.

This strategy has proven effective; although Swire Properties' net profit fell by 41.5% year-on-year to HKD 6.7 billion last year, its attributable rental income from mainland retail properties grew by 2% year-on-year to HKD 5.225 billion, with the overall rental income from retail properties exceeding 50% for the first time.

In fact, facing the ongoing challenges of a sluggish Hong Kong office market, the mainland market has become a key safe haven for Swire. As the provider of the "Louis" platform, Swire Properties has long regarded Nanjing West Road in Shanghai as an "irreplaceable asset."

"Shanghai is the starting point for Swire Group's business in China, and Nanjing West Road has always been the core area of Swire Properties' retail strategy."

Han Zhi, Director of Retail Business at Swire Properties, told Wall Street News that four years ago, Swire Properties began managing the Zhangyuan urban renewal project. At the end of 2022, the first phase of Zhangyuan opened, introducing the LV travel home space to Nanjing West Road for the first time, bringing Paris's VIC experience space to China Looking back, the "Louis Building," a composite space that integrates retail, exhibitions, and dining, is not only a strategic bet by luxury giants on the Chinese market but also reflects the operational thinking of its partner Swire Properties in breaking through the winter of commercial real estate. Through scenario consumption and regional ecological reconstruction, it aims to leverage the growth engine in the era of stock competition.

"The entry of LV is another important milestone in our deep cultivation of the retail experience upgrade in the eastern end of Nanjing West Road, marking a key step towards making this business district a global top retail destination," said Han Zhi.

Industry insiders believe that projects like the "Louis Building" imply financial considerations for asset appreciation. By introducing first exhibitions, first stores, and other "traffic generators," Swire Properties can not only enhance immediate rental income but also trigger asset revaluation through the leap in the business district's capability. This reflects the survival rules of Swire Properties in the commercial world.

Swire Properties has not chosen aggressive mergers and acquisitions but has refined each project over a 15-year cycle, from the restoration of the historical Zhang Garden to promoting the "Louis Building." Its operational philosophy is always anchored in "time compounding"—using cultural stickiness to counter traffic anxiety and financial health to resist cyclical fluctuations.

"The goal of Swire Properties has never been limited to singular commercial success but is committed to the overall community building of the area where the project is located, striving to deeply integrate cutting-edge international retail concepts with the unique cultural genes of each location," Han Zhi stated. "In the past few years, we have collaborated with the Jing'an District government, partners, and brand partners to promote the comprehensive upgrade of the retail ecosystem in the entire Nanjing West Road business district."

For Swire Properties, this commitment will continue.

Han Zhi revealed to Wall Street News that the currently opened West District is just the first phase, accounting for only 1/3 of the entire project, with another 2/3 set to open in phases starting from mid-next year. By the end of next year, the project will connect three underground subway lines, further enhancing the area's capability.

As indicated by the continuous flow of visitors through the porthole of the giant ship: when consumption becomes a journey towards the stars, the helmsman of commercial real estate can only navigate steadily and far by aligning with the cultural compass amidst the winds and waves