Chinese Developers Move Beyond Shopping; Building a Deluxe Mall Isn’t Enough; Firms Add Rafting, Skiing, Riding

Chinese Developers Move Beyond Shopping

Building a Deluxe Mall Isn’t Enough; Firms Add Rafting, Skiing, Riding

WEI GU

Updated Nov. 14, 2013 7:29 p.m. ET

To make a big profit as a Chinese property developer, it used to be that all you needed to do was build a mall and stuff it with luxury brands. But as Chinese get richer and have more time for leisure, they want more than just shopping, and developers are moving to meet the demand, providing venues for horse riding, rafting, skiing and more.Adventurous business types in China enjoy the thrill of sports like polo. Travel has developed their tastes for activities such as scuba diving. Chinese parents want to expose their children to pursuits that are healthy, stimulating, exciting and new.

“For the Chinese, travel used to be just about sightseeing,” said Qian Jiannong, assistant to the president at Fosun International Ltd., the Shanghai-based conglomerate that owns a stake in French resort company Club Méditerranée, CU.FR +0.46% better known as Club Med. “Now it is about a different experience like bungee jumping and archery.”

Bingna Guo, a partner at U.S. law firm O’Melveny and Myers LLP, has been taking riding lessons since 2009 and keeps a horse of her own in a stable in Shunyi, near the Beijing international airport. Riding a horse is good exercise for people who sit in front of a computer all day, said the litigation attorney. Her weekly sessions are also a way to “connect with nature and communicate with animals.”

In Tianjin, 30 minutes by train from Beijing, Goldin Properties Holdings has built China’s biggest and most lavish polo club, with the aim of luring horse enthusiasts like Ms. Guo. The development—a business district, a five-star hotel and high-end apartments and villas with polo-club views—is set on 80 hectares of rolling lawns and manicured gardens.

Hotel-occupancy rates have been dropping in China, where supply has been outgrowing demand in the past few years, driving developers to seek ways to differentiate their products. Sporting facilities can be expensive to build and maintain, but some developers see them as a necessary investment.

Consumer demand has led hotels and resorts to quickly ramp up developments of leisure-themed projects, said Sebastian Skiff, executive director of CBRE Retail Services in China.

Skiing is one area of growth. In Zhangjiakou, Malaysia’s Genting Bhd. has built China’s largest ski resort, with 87 ski runs and 22 lifts. About 160 kilometers northwest of Beijing, Zhangjikou is angling to host the 2022 Winter Olympics. Wanda Commercial Properties (Group), 0169.HK -0.78% China’s largest commercial developer, has a resort development in Changbaishan, on the border with North Korea.

Both have large numbers of residential properties for sale. These ski towns are easily accessible from Beijing and cater to locals, offering hot-pot restaurants and hot springs. Club Med in Yabuli, near the northeastern city of Harbin, even has a karaoke room for those who like to sing after a day on the slopes.

Other developers are sinking money into water sports. In Sanya, on Hainan Island off China’s southeast coast, Fosun is investing $1.5 billion in the world’s third Atlantis hotel, following ones in Dubai and the Bahamas. The Atlantis Sanya will have an aquarium, 20 restaurants, and promises “revolutionary water play” in its water park. “We want to bring concepts that have proven to be successful globally to China,” said Mr. Qian. “Chinese consumers are open-minded and welcome new ideas.”

The Atlantis Sanya, scheduled to open in 2016, will have 1,300 guest rooms. It is hardly the biggest development for Hainan, which already has about 200 hotels with more on the way. Agile Property Holdings 3383.HK +1.35% and Morgan Stanley Real Estate are building six five-star hotels and a marina, and have already sold 10,000 apartments at Sanya’s Clear Water Bay. The development will offer golf and water sports.

There is activity enough to raise concerns about overbuilding. The second-quarter occupancy rate in Sanya was 53%, down from 71% for the whole of 2011, according to China’s National Tourism Administration. In part, that is because anticorruption measures and a slowing economy have curbed demand for corporate gatherings. entertainment and conferences.

And there is another catch. Chinese developers may be good at building quickly, but running facilities is a new skill for them. “Many of those facilities aren’t just plug-and-play,” said Randall Hall, head of China, Taiwan and Hong Kong at property-services firm Cushman and Wakefield. “You need international professionals to make it work. Hardware is just one element.”