The project’s location is on one of Shanghai’s most illustrious shopping streets (West Nanjing Road) and is located on top of the intersection of three major metro lines, ensuring significant traffic to the project and the surrounding facilities.

Landlord details

Swire is a famous international developer with over 200 years of experience and properties all over the world. They have an extensive track record of popular and successful mixed-use properties across China and are one of the leading developers in mainland China and around the world. We had worked with Swire before in mainland China, and this proved to be one of the keys to successfully brokering this deal. They trusted us even though electric vehicles were not their original intention for the space, and it proved to be a significant win for the project and kicked off a wider market trend in China.

TIMING

The timing for this project proved to be complicated because, by the point negotiations had started, the retail podium was almost fully occupied. This left us in a difficult negotiation spot because they already had a particular type of brand (fashion) they wanted to occupy the space. Electric vehicles had never been done before on L1 in high-end shopping malls in China, and Swire took a considerable risk changing their retail strategy for the unit. However, their confidence in the concept paid off and their reputation for foresight grew considerably.

Construction or other building issues

One of the two primary issues regarding the store’s physical location was that it had to be located next to the office towers. It was important for Tesla that their store be located towards the office towers, near the drop-off point, so that Tesla could garner maximum visibility to the staff and visitors to the office towers. This was the main target demographic for Tesla as the office tower was filled with professionals who would be able to afford one of their vehicles and young, tech-savvy workers who were attracted to Tesla’s lifestyle positioning.

Car parking and test drive access

The second major issue in the negotiations was the installation of two branded charging stations for Tesla vehicles. Though not common requirement at the time in the market, all negotiation partners came to the understanding that a high-end tech company could drive significant footfall to the project through such a set up and it proved incredibly successful for both the tenant and the landlord.

Key learnings

• Relationship with the landlord is critical. Swire trusted us to implement a strategy that had never been implemented in the market before, and they were rewarded by being seen as a trendsetter in the market.
• Right place, right time. EVs were just about to boom in China, and with the launch of Swire’s property as one of the highest-end retail malls in the country, we were able to dramatically expand Tesla’s brand impression on Chinese consumers.
• Trust in our expertise. Savills has a deep retail experience in China, and we communicated our vision to the landlord. It would have been easier to simply recommend a fashion brand for the space, but we knew the space, landlord and brand had enormous potential. All parties involved were rewarded when the entire market followed the trend by introducing EVs on L1 retail podiums all across the country.

For more information, contact Larry Brennan.