Treasury Holdings' China unit, China Real Estate Opportunities (Creo), said yesterday it had signed a conditional deal to buy a downtown Beijing shopping centre, currently under construction, for €362 million.

The Xidan Centrepoint shopping centre, office complex and hotel is a mixed-use development, located around 2km east of the showcase central business district currently being built in the capital.

The vendor is a wholly-owned subsidiary of China Metallurgical Construction, one of China's largest state-owned conglomerates. Big state-owned groups, particularly those in "old-fashioned" industries such as metallurgy or railways, are increasingly being encouraged to diversify into the real estate market.

Xidan is a bustling shopping area, running north-south around one kilometre west of the Forbidden City and Tiananmen Square at the heart of the capital and it is popular with local shoppers in China's growing domestic consumer market.

Under the terms of the deal, Creo has agreed to buy 100 per cent of the property - pending shareholder approval - once building is finished next December.

When completed, the Xidan Centrepoint will have a total gross built floor area of 195,000sq m on 15 floors above ground and four floors below ground.

Of this area, 103,000sq m is designated for retail, a 372-room luxury hotel component comprises another 32,000sq m, while an office component is a further 16,000sq m. The remaining 44,000sq m will be used for car parking spaces and ancillary services.

Creo has agreed to pay for the property in stages as it is completed, acquired and leased out.