K11, a subsidiary of New World Development, said it plans to build 21 new projects nationwide by fiscal 2026, with a business focus on the Guangdong-Hong Kong-Macao Greater Bay Area, as the company is bullish on the growth potential of consumer spending.

Based in Hong Kong, K11 said it expects to achieve a compound annual growth rate of 30 percent between fiscal 2021 and fiscal 2026.

As one of the company's major projects, the Hangzhou Wangjiang New Town project, due to open in 2026, is its first such project in the provincial capital of Zhejiang province.

Currently, China is home to more than 4,000 shopping malls, a number which is three times that of the United States. According to a report by the Chinese Academy of Social Sciences, the number is expected to grow to 10,000 by 2025.

By 2025, Chinese consumers are also forecast to spend 1.2 trillion yuan ($166 billion) on luxury goods, according to research firm Statista.

"Due to COVID-19, affluent consumers on the Chinese mainland are shifting their luxury spending back home. They are becoming more discerning and seeking hyper-relevant luxury experiences while leveraging local resources," said Adrian Cheng, chief executive officer of New World Development and founder of K11.

"Millennials and Generation Z consumers are expected to be the key growth driver in the Chinese luxury industry with a higher standard for localized cultural relevance of brands. Brands will have to engage with this fast-evolving demographic through innovative technology and retail," Cheng said.

The company said its K11 franchise includes a range of "museum retail" concepts targeting consumers in younger generations, such as K11 Art Mall and K11 Select.

For instance, earlier this month, the K11 Craft & Guild Foundation organized an art exhibition at the Shanghai K11 Art Mall. Named K11 Voyage de Savoir-Faire and centered on Chinese traditional craftsmanship, the show has attracted a large number of visitors. The exhibition will also be launched later this year in Wuhan, Hubei province; Guangzhou, Guangdong province; Shenyang, Liaoning province; Hong Kong and Paris.

In the second half of 2021, K11 maintained strong sales growth and a high occupancy rate of its malls. In first-tier cities, the occupancy rates reached 92 percent during the period. On the Chinese mainland, sales in K11 malls grew by 39 percent year-on-year, when the market average growth rate was 4 percent year-on-year, the company said.

Sales of K11 Select in Wuhan's Optics Valley grew 65 percent year-on-year in the second half of 2021, it said.

K11 said it is continuing to develop large-scale integrated projects, which combine retail, residential and office space.

China will become the world's largest luxury goods market by 2025 and Chinese consumers are likely to make up nearly half of global spending in the sector, said a report by consultancy Bain & Co.

Before the pandemic, Chinese travelers had largely fueled luxury spending in Europe and the US.Now, luxury consumption in China will be supported by a backflow of spending and the gradual reopening of international travel, the consultancy said.

"Though the luxury market in China was affected by the COVID-19 resurgence, we expect luxury product shopping by consumers to recover to the pre-COVID-19 levels between the year-end and the first half of next year," said Xing Weiwei, partner of Bain & Co.