Simon and MSREF will each own a 32.5% stake in the venture, while SZITIC will have a 35% holding. The developments will be urban, multi-level centers between 430,000 sf and 750,000 sf, anchored by Wal-Mart. Among the cities they are considering for the projects include Hangzhou, Nanjing and Shanghai, all in the Yangzte River delta.

The first planned center is a 500,000-sf development in Hangzhou, a city of six million people located two hours from Shanghai. The venture expects to start construction on that center in October and complete the project in the spring of 2007. The project will cost from $65 million to $70 million to construct, Stephen Sterret, Simon's CFO, tells GSR.

The malls will be in densely populated areas with few cars and public transportation, Sterret says. Some retailers in Simon's US-based portfolios could be candidates for entering the markets. "I'm sure there would be a fair bit of retailer interest," Sterret adds.