Beijing Taikoo Fangs: The Landmark Has Been Built, The Challenge Is Coming | Business Observation

Recently, the construction of Phase II of Yitihang has made phased progress. The main structure of the project has been fully completed, and the initial shape of the regional landmark is emerging.

Public information shows that the building area of Phase II of Yitihang is 560,000 square meters, including 7 Grade A office buildings, 1 hotel, and multiple commercial buildings. It is expected to be operational by 2027.

After the completion of Phase II, it will be fully connected to the existing Yitihang Shopping Center via two sky bridges and six underground corridors, forming Beijing’s largest commercial complex within the Fifth Ring Road, integrating shopping, office, hotel, and waterfront leisure. It will also be renamed “Beijing Taikoo Fong.”

Currently, this project has become Swire Properties’ largest single investment and scale development project in Mainland China.

According to previous reports, in 2007, Swire Properties and China Ocean Group each held 50% of the shares to develop Phase I of Yitihang, which included a shopping center, a Grade A office building, and a leisure business hotel called Beijing East U, opened on September 20, 2012.

In 2020, both parties announced a joint investment of approximately 23 billion yuan to promote the expansion of Phase II of Yitihang.

During the development period, Ocean Group faced liquidity issues due to the downturn in the real estate market and sold 64.79% of its equity and related debt rights in Yitihang Phase II to Swire Properties and China Life, the major shareholder, at a price of 4 billion yuan in June 2024.

Swire Properties invested 900 million yuan to acquire 14.895% of the equity, and China Life invested 3.1 billion yuan to obtain 49.895%. After the transaction, Yitihang Phase II will be held by Swire Properties, China Life, and the management entity of Zhuangtai (fully owned by Zhuangtai Township Government), with stakes of 49.895%, 49.895%, and 0.21%, respectively.

With the optimized equity structure, the stability of project development has been further enhanced, laying a solid foundation for the realization of Phase II.

Currently, tenants in Yitihang include Arc’teryx, Descente, i.t, Longines, Lulu Lemon, and others. By 2025, tenants such as Brooks, Li Auto, and Luk Fook Jewelry will be added.

Thanks to continuous brand upgrades and a recovery in consumer spending, retail sales at Yitihang increased by 3% in 2025, with the mall occupancy rate reaching 99%.

The completion of the main structure of Phase II signifies further improvement in Swire Properties’ investment property layout in Beijing’s core commercial districts.

However, Phase II, dominated by office buildings, is quite different from Phase I, which focuses on retail. Currently, demand for office space in Beijing remains weak. Swire Properties’ related segments have also shown a decline in performance, with rental income from office properties in Mainland China decreasing by 4% to HKD 363 million in 2025.

Swire Properties recently forecasted that in 2026, despite limited new office supply in Beijing, demand will remain weak. With rising vacancy rates, rental prices are expected to stay under pressure.

As for Taikoo Fong in Beijing, centered on office use, it will officially start operations in 2027. It will still face external pressures from overall market demand weakness, and achieving the expected progress in tenant recruitment and rental levels will be significantly more challenging.

It is worth noting that in recent years, Swire Properties has been increasing its investment in Mainland China. The company’s “HKD 100 billion investment plan” is ongoing. As of March 6, 2026, the total committed investment amount is about HKD 67 billion, with HKD 46 billion allocated to the Chinese mainland.

Currently, besides Beijing Taikoo Fong, projects such as Xi’an Taikoo Li, Sanya Taikoo Li, Lujiazui Taikoo Yuan in Shanghai, Qiantan Integrated Development in Shanghai, Guangzhou Julongwan Taikoo Li, and the third phase of Guangzhou Taikoo Hui are all under construction.

In the future, Swire Properties needs to balance retail growth and office market pressures. The operational capacity and investment returns of multiple new projects entering the market will directly determine its long-term performance in Mainland China.

Text / Huang Ning