SHANGHAI, May 22 – Gambling magnate Stanley Ho and LVMH Moët Hennessy – Louis Vuitton chairman Bernard Arnault attended the groundbreaking ceremony of L’Avenue Shanghai last May 20.

Mr. Ho and LVMH co-invested US$500 million for the project to develop an area of about 140,000 square meters located in the Hongqiao Development Zone and slated to be finished by 2012.

Upon completion, the upscale commercial complex will include a 47,000 square meter Grade A+ office tower and a 49,000 square meter high-end shopping complex. Posh international brands like Louis Vuitton are expected to set shop in the area.

“Buying power is growing fast in China,” Mr. Arnault told Shanghai Daily. “The project shows LVMH’s confidence in the future of China, and in the future of Shanghai.”

A leader in the luxury industry, LVMH Moët Hennessy – Louis Vuitton, has a portfolio of more than 60 brands. On the other hand, Mr. Ho is considered one of the richest people in Asia and is sometimes called, “The King of Gambling,” for his monopoly of the Macau gambling industry for more than 30 years.

The investment reflects China’s significance in the luxury industry. Despite difficult times, luxury brands are not backing out of developing their Chinese market. Last year, luxury sales in the country reached US$8.6 billion or 25 percent of the global market.

According to the World Luxury Association, China has already overtaken the United States as the second largest luxury goods market after Japan. Recently, Giorgio Armani and Dunhill re-launched stores in the city while Gucci will open its new flagship store next month.