L’Avenue, a luxury retail and grade A office complex in Shanghai that is 50 per cent owned by STDM China Holdings Ltd., is being sold to high profile private equity firm Blackstone Group as the two-year operation of the building has not proved to be satisfactory to its owners, Mainland Chinese media outlets have reported. The story was first published by Shanghai-based media outlet thepaper.cn earlier this week, which reported that the disposal of the building was nearing completion with a transaction cost exceeding RMB5 billion (US$806 million or MOP6.44 billion), citing unidentified sources familiar with the deal. The land on which L’Avenue sits was acquired jointly by Macau gaming tycoon Stanley Ho Hung Sun and LVMH group via the former’s STDM China Holdings Ltd. and L Real Estate in 2007. L Real Estate is an LVMH-linked private equity firm. The land was then sold for over RMB1.43 billion in 2007, with the floor price of the land RMB19,073 per square metre at the time. STDM China and L Real Estate each held a 50 per cent interest in the asset, according to reports from thepaper.cn and Chinese-language media outlet ChinaLuxus.com. The reported transaction has yet to be confirmed by Blackstone or LVMH Group. L Real Estate, together with STDM China, started the US$500 million development project L’Avenue in 2009. But the complex, a 99,740 square metre office and retail building located in western Shanghai, was only opened for operation in 2013. Nearly 20 shops in L’Avenue sell LVMH’s brands, including Dior, Louis Vuitton and Fendi. Fellow luxury retail groups Prada, Kering and Richemont also operate stores in L’Avenue. However, flat sales for L’Avenue against the background of China’s anti-graft drive have exerted pressure on its owners, triggering the dale of the building, according to reports; last year, the net income for L’Avenue was less than RMB250 million. Last year, the LVMH group saw its operating profit fall by 5 per cent year-on-year to nearly 5.72 billion euros, hit by lower spirits, wine and jewellery sales as well as a weaker China market. Co-owner STDM China, which is linked to the casino industry here, also experienced some buffeting last year as the city’s gross gaming revenue started to register a decline from June and continues. The two owners of the building have mulled selling its ownership since last year under the increasing financial pressure, according to reports. L’Avenue has reportedly been offered at RMB6 billion but this level is a distance away from the final purchasing offer, reports said.