Behind The Fiery Property

Compared with the relatively low profits of the retail industry, switching to commercial real estate is more attractive to retail giants.

After two years of global financial crisis, Beijing's retail and commercial real estate market jumped sharply in 2010.

According to the international property service agency, it investigates the statistics of World Bank Richard Henry.

With the gradual deepening of the regulation of the housing market, some developers began to turn to commercial real estate.

It is reported that in 2011, there will be nearly 20 large-scale commercial projects in Beijing, with a total construction area of 1 million 200 thousand square meters.

Vanke, COFCO, poly, Zhonghai, Fuli and many other domestic front-line residential development enterprises have announced the development strategy of commercial real estate. The proportion of commercial real estate development in the future will account for 20%-30% of its overall development investment.

According to the analysis of the industry, the ongoing regulation and continuous development of affordable housing is changing the expectations of the housing market. Under the environment of frequent market regulation and market fluctuation, the single focus on residential development business is too risky.

Under this situation, many residential developers turn to commercial real estate to balance risks and seek broader development space.

For commercial real estate, retail enterprises are also unwilling.

With the growth of domestic consumer goods retail sales and residents' income,

Following the announcement of TESCO, one of the three major retailers, to build its own shopping mall in Ledu, the Huarun supermarket, the largest supermarket chain in China, has announced its entry into the regional shopping center. Its landmark project, "Ode to joy", opened in Shenzhen recently.

According to Huarun's chief executive, Huarun plans to develop the industry in the future.

Retailers accelerate to invest in real estate

In fact, the trend of retailers building their own property in 2009 has become a common practice.

Under the increasing pressure of rent, retailers try to enhance commercial appreciation by running regional shopping centers.

"Retail businesses invest in production capacity and optimize asset structure, especially in listed retail businesses, and continue to expand investment or mergers and acquisitions to maintain value added."

Experts point out that compared with the retail industry's low profits, the development of regional shopping centers is more attractive, which also causes the retail industry to switch to commercial real estate.

According to statistics from China Chain Store Association's domestic chain top 100 enterprises, the average net profit margin of the industry is only 1.32%. Even the top ten retailers in China have a net profit margin of only 1.77%. Compared with the commercial real estate appreciation space, the rate of return on investment is far from that.

However, for retailers to enter the regional shopping centers in this round, some experts are cautious about retailers' massive march into commercial real estate such as regional shopping centers. They think that since the purchase of property is large, the cycle of return is long, the demand for cash flow is very high, and a large amount of capital is needed, which will seriously affect the expansion speed of retail enterprises in the main business.

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Behind the fire

In recent years, many cities have put forward the plan of building "financial center" in the process of pformation.

According to incomplete statistics, dozens of cities in China have proposed the construction of "international financial center" and "regional financial center". Yunnan, a frontier province with a weak financial foundation, has proposed that it should take 20 years to build "Pan Asian financial center".

Real estate industry analysts believe that, in fact, from the internal law of the development of the financial industry, most cities do not have the actual conditions for developing into a "financial center city" in the short term.

Some cities plan to build 10 million square meters of commercial real estate, even if they account for only 1/2 of them. They are close to or even exceed the stock scale of commercial real estate in Beijing and Shanghai. At the rate of 100 thousand square meters per year, it will take at least 50 years for the whole market to absorb.

Such "advance" has actually planted the seeds of foam.

Although some retailers think that self built regional shopping centers and other commercial real estate, they can do better than real estate developers.

However, many years of real estate investment and real estate investors, Mr. Zhao Jiusheng, did not look at the large-scale development of commercial real estate for retail enterprises.

"Retail enterprises do commercial real estate, when they really operate a project, they will encounter many bottlenecks."

Zhao Jiusheng frankly said, "not only the financial system, business resources, in the specific operation will encounter professional institutions, professionals bottleneck."