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Annual Development Report of China's Commercial Real Estate Industry: online and offline look forward to integration
The Commercial Real Estate Research Association of the All-China Real Estate Association (ACREA) under the All-China Federation of Industry and Commerce (ACFIC) and RET Reynolds have jointly released the "China Commercial Real Estate Industry Annual Development Report 2018/2019", which takes stock of the representative events in the field of commercial real estate in 2018, and looks forward to the development trend of the industry in 2019. The chief expert of the Report, Mr. Wang Yongping, President of the Commercial Real Estate Research Association of the All-China Real Estate Association, pointed out that the biggest change in the current consumer market is not the so-called "upgrading" or "downgrading", but rather the obvious grading of the consumer market, which has put forward a higher demand for commercial operation and innovation.

Since the consumer market is clearly graded, it puts higher requirements on commercial operation innovation.

Because of the macroeconomic impact, consumers are more cautious in consumption, coupled with the lack of innovation in the business itself, the channel diversion is more obvious, the industry's market expectations for 2019 are generally downward, the expansion of new projects is more conservative. Catering, cinema and other shopping centers traditional growth engine performance is weak, the development of new retail is not satisfactory, the industry entered a new period of "no innovation is not business", there is an urgent need for alternative innovative forms and models.

The integration of online and offline, represented by Ali's shareholding in the Home of the Real, will enter a stage of multidimensional integration of technology, operation and culture after the completion of the equity integration, and new digital stores are expected to continue to accelerate the landing of the new retail business model may be more advanced, and the industry is facing a reshuffle of the possible. Although the huge loss of Yonghui super species triggered some concerns about the new retail, the profitability of the new retail model has also been more questionable, but for the online and offline integration of the industry is still generally looking forward to.

Extended reading: eight phenomena in China's commercial real estate industry in 2018

One, the inventory of high-quality property revitalization, to meet the heat of asset securitization

Representative events: Guangzhou Zhengjia Plaza, Beijing Guorui Mall, Beijing Hopscotch, etc., the issuance of CMBS/REITS-like products

Reason for concern: 2018 unprecedented commercial asset transactions In September, "GF Hengjin - Zhengjia Enterprise Group Zhengjia Plaza Asset Support Special Plan" with Guangzhou Zhengjia Plaza as the underlying property was successfully issued, with a total scale of RMB7.3 billion, becoming the largest CMBS in 2018. In addition, a number of high-quality properties such as Beijing Guorui Shopping Center, Beijing Hardman Plaza, Beijing Hopscotch, Beijing Century Jinyuan, Suzhou Xinjinyuan Neighborhood Center and Shenzhen Longgang Vanke Plaza were successfully approved or issued securitization products. Against the background of generally high financial leverage in real estate, securitization of commercial assets is more realistic, and is also an important symbol of China's commercial real estate towards internationalization and standardization.

Two, bulk asset transactions are hot and cold, and the level of operation highlights the value of assets

Representative events: Shimao Gongsan auction, Beijing Pacific Century Premium Center changed ownership again

Reason for concern: At the end of 2018, two commercial asset transactions in the Beijing market attracted attention. One was the auction of the assets of Shimao Gongsan belonging to Leshi Holdings, and in early December, Ali's website carried out a pre-auction announcement, with an appraisal price of 3.289 billion yuan, while the starting price was only 2.302 billion yuan; and the other was the Pacific Century Place (PCG) Center project, which was sold at a high price of 10.5 billion yuan, breaking the record of the transaction amount of Beijing's commercial properties. This cold and hot behind the capital market for the recognition of the value of asset operations.

Three, the new retail is not well received, online and offline look forward to integration

Representative events: super species losses, box horse fresh life suffered "labeling door", the box pony open to join the United States officially entered the new retail

Reason for concern: in December, the "new retail pioneer" super species subject In December, the "new retail pioneer" super species main company Yonghui Yunchuang exploded accumulated total losses of 1 billion huge, so Yonghui announced that it will be divested from the listed company business system. Previously, the box horse fresh sheng was also exploded to modify the shelf life of food "label door event", as well as can not wait to launch the box pony to join the business, the Jingdong 7FRESH also shuffled the personnel, which let the industry generally formed the impression of the new retail is not well received. Despite the setback of the new retail pioneer experiment, however, apparently did not therefore give up the exploration of commercial innovation, huge losses of super species has said that it will still continue to develop independently of the listed company. Meituan will be its fresh food supermarket brand "palm fish fresh" upgraded to "small elephant fresh", but also accelerated the pace of store expansion. Jingdong 7FRESH after personnel reorganization to start again, the channel has been sunk to the third and fourth tier cities. New retail forward step has not stopped, online and offline towards the integration of expectations still exist.

Four, entity business plus data intelligence, technology-driven operations become *** knowledge

representative events: CapitaLand Next-Ten, Baolong Creative Labs, Haidilao unmanned restaurant was born

Reason for concern: Joy City, Impression City, the Aegean Sea, as the representative of the shopping centers have to build their own commercial technology companies, some have also added the position of chief technology officer, the more focus on technology to lead the commercial operation, the more the company has to build its own business. Pay more attention to the leading role of technology in commercial operations. As a commercial real estate leader, CapitaLand has created a commercial new species model "Next-Ten". Baolong and Jingdong cross-border to create "Baolong Creative Lab", docking new retail, the industry involves children, food and beverage, supermarkets, digital, etc., including the details of life, and the integration of online consumption to achieve the flow of import. At the same time, Baolong has also invested in *** enjoy follow service robots that can be widely used in shopping centers, commercial complexes, large retailers and theme parks. Haidilao's unmanned restaurant, on the other hand, has become a Netflix hit. Entity business from the past look to third-party technology companies to provide services, to now have their own investment in research and development of commercial data technology, showing the hope that better commercialization of the urgent desire to apply.

Fifth, the stock of commercial have upgraded urban renewal to create new business opportunities

Representative events: Shanghai Shimao Plaza, Beijing Square, Shenzhen Indy Center reopened

Reason for concern: in 2018, a number of urban renewal commercial projects bright reopened. Beijing Place, located in the core area of Beijing Qianmen, is fully open for business, and many innovative business models such as Muji experience hotel, Starbucks selected flagship store and Page One flagship store are unveiled, which subverts the backward and outdated impression consumers have had of Qianmen's business for many years.Shanghai Shimao Plaza, a subsidiary of the Shimao Group, reopened in September, and its strong sense of fashion and innovation attracted a large number of people to visit. sense of fashion and innovation attracted a large number of young guests, doubling the performance before and after the remodeling, on both sides of the ice.In 2018, a number of influential renewal projects were traded at the same time. Joy City acquired the Daxing Fire Temple project in Beijing and decided to transform it into a new product line, "Danyue Chunfengli". CapitaLand acquired Shanghai's tallest twin towers for $12.8 billion, with plans to build Shanghai's third Raffles City. As the incremental commercial development cost is getting bigger and bigger, the cycle is getting longer and longer, and the location is getting more and more remote, the renewal and transformation of the stock of commercial is becoming a new business opportunity.

Sixth, commercial real estate investment is generally overheated, the core location is still sought after

Representative events: Hang Lung and other mainstream commercial real estate developers bidding for Hangzhou's most expensive commercial land

Reason for concern: in May, Hong Kong's Hang Lung Properties, a renowned commercial real estate developer, picked up a plot of land in Baijingfang, next to Hangzhou Mansion, Hangzhou's core business district, at a price of 10.73 billion yuan, a high premium rate of 118 percent. Hangzhou will have its first Hang Lung Plaza. On the day of the bidding, in addition to Hang Lung, participating in the bidding there are China Resources Sun Hung Kai, Ali City Investment, New World, Wharf, Yintai well-known real estate companies, and the competition was once into a white-hot. In the context of general overinvestment in commercial real estate, Hangzhou, the reason why this commercial land auction is so sought after, does not mean that the commercial real estate investment fever rekindled, mainly based on the project in the city quantum and location of the case advantage, the core location of the commercial resilience of the traditional investment philosophy is still recognized.

Seven, consumer downgrading debate, commercial potential focus on activation

Representative events: Pinduoduo listed, Ali shares in Huitongda

Reason for concern: "rural surrounded by the city" Pinduoduo listed in the U.S. in July, has achieved a great success in business, the entity of the business, many people will be the success of the downturn in the economy, the success attributed to the economic downturn, the success of the business, the business of the business of the business of the business of the business. The success is attributed to the so-called "consumer downgrade" under the economic downturn. In fact, reports released by the Ministry of Commerce and other authoritative departments show that the trend of consumption upgrading has become irreversible. Pinduoduo's success is to a greater extent through the mobile Internet platform to form the collection and upgrading of the underlying consumption. In addition, Huitongda, an e-commerce platform for small towns, has also received a 4.5 billion yuan investment from Ali. The sinking of the e-commerce platform not only activates the huge consumption potential of small and medium-sized cities, but also boosts the confidence of the development of physical business in small and medium-sized cities.

Eight, the shopping center investment difficulty phenomenon is prominent

Representative events: Guangzhou K11, Changsha IFS, Kunming Joy City, Xiamen, China Resources Vientiane City and other projects opened on schedule

Reasons to pay attention to: commercial real estate over the years in large strides in the development of shopping centers, resulting in excessive competition, coupled with the macro-economic situation by the impact of the downturn, the ability of many brands to bear the lease declined, the new project generally face difficulties in investment promotion, funding and opening, even first-tier cities and large central enterprises have encountered the same problem. According to the sample data in 2018, the actual number of shopping centers with a volume of more than 50,000 square meters opened on schedule was less than 60%. On the other hand, well-known commercial real estate developers such as Wanda, China Resources, Yinli, Joy City, Longhu and other well-known commercial real estate developers, by virtue of their brand reputation, professional team, and financial advantages and other comprehensive strengths, whether they are self-operated, self-built, or entrusted with the management of the project, have achieved the opening of the project as scheduled, and some of these projects have also become a new benchmark for the upgrading of the local business.