Yan Sihui: Shopping Centers Blindly Increase Catering And Increase Costs

If business is done well and long-term returns can be realized, this asset can also be used as a financing tool, so that funds can be reinvested into the land market and brought back to development, and a benign cycle will be formed.

If not well done...

That's the equivalent of digging a black hole for investment. From planning to opening operations, all kinds of conventional and unconventional expenditure costs are enormous pressure.

Yan Si Hui, who moved from the Ministry of investment to the Ministry of Commerce, was somewhat calm about the development of commercial projects. She emphasized that the rate of return on investment was decreasing and the difficulty of investment was increasing.

At present, shopping centres should emphasize experience and be vigilant against the increase of late maintenance costs brought by these experience formats.

80 thousand square meters or above is suitable for long-term holding.

Southern Metropolis Daily (hereinafter referred to as "reporter"): you pferred from the investment department to the Ministry of Commerce. How do we see a shopping mall from an investment perspective?

Yan Sihui: when I'm doing business, I will think about how investors think about the shopping mall. As we say now, we need to do experiential business, but we still have to consider how the whole shopping mall can recover the investment as soon as possible.

We will provide "account books" to developers and see the limits they can tolerate. If the investment plan under this scale and format is intolerable, we should replace other schemes, such as reducing the whole business to do community or block type business, whether sold or rented.

If the developer has enough capital and wants to hold commercial property for a long time, or if he wishes to pfer it to a commercial investment company as a whole, the scale of the property is generally more than 80 thousand -12 square meters. When the volume is enough, the profits of the investors will be relatively large, so that they will be willing to hold for a long time.

Interviewer: how do you make account books?

Yan Sihui: we will make a cash flow statement to the developers according to the reasonable rent format and the rental level that the tenants can bear.

In the form of cash flow statement, we will comprehensively consider the cost of building construction, financial cost, rental income and operating expenses, and calculate the indicators of internal rate of return and investment recovery period, so as to provide reference for developers.

Through this account, we can see whether the cost and income of the project are balanced, and then make corresponding adjustments.

For low income projects, developers should control construction costs and seek relatively low interest financing channels.

If there are no sufficient funds or financing channels to support the project with long incubation period, it is necessary to consider some measures such as the sale of commercial areas or the reduction of scale, so as to ensure the safety of investment.

Reporter: in addition to these basic expenses, do we need to pay attention to other possible costs?

Yan Sihui: for example, catering.

Many consultants now advise developers to increase the proportion of catering business, but catering will also cause new problems. Although it can drive people to consume, the consumption purpose of this group is very strong. If retail sales are not enough to attract them, they may go away after dinner, and at the same time, they will not stay here all day. But because of the increased proportion of restaurants, the cost of all facilities and equipment will increase.

Some owners do not have too much confidence in their shopping malls, and the catering facilities have achieved 70% of the presupposition, but we should also pay attention to the increase of related costs.

Special format and unconventional design will bring additional maintenance costs.

For example, shopping malls, small aquarium, vertical greening and drainage become new trends. The cost of maintenance involved in these designs is obviously higher than that in general commercial buildings, and there is no direct rental income.

Although the starting point of introducing special format and characteristic design is to attract people, the proprietor still needs to consider carefully the cost and income, whether he can leverage or promote the overall value of the project.

Reporter: now that there are endless commercial projects, are regular refurbishment for long held projects expensive?

Yan Sihui: the mall runs every day, receives a large number of passenger flow, the cost of later maintenance can not be ignored, and the original project needs to be renovated, so as to maintain a good shopping environment and bring fresh experience to consumers.

For example, the Tai Koo square, which opened in 1990, carried out large-scale renovation projects in 1998 and 2008 to maintain vitality. It took four years to complete the renovation in 2008 and 2011. In order to avoid affecting the tenants' business, most of the works were carried out after graduation every day.

The construction standards and late maintenance of shopping centers in China are weaker than those of mature shopping centers in Hongkong, and are faced with a changing market environment.

Reporter: from the investment perspective, how much is the developer's return on investment?

Yan Sihui: the general rate of return on investment is more than 8%, but in the past three years, some developers can accept 6%. The payback period is generally within 10 years, but at present, pure business is hard to achieve unless it is a complex and some products that can be sold for 10 years.

Reporter: sufficient funds do not mean that the shopping center can be done well.

Many projects are stuck in "investment promotion".

How to plan the business scale in the early stage and make investment better?

Yan Sihui: first of all, the single storey building area is more particular.

The monolayer reaches 15 thousand -2 10000 square meters (the following area will be separately marked, other areas refer to the construction area), and the area will be 8000-12000 square meters.

For a shopping mall with a floor area of only 3000 square meters, if you want to enter a clothing main store, it will occupy more than 1000 square meters of area (use area). Therefore, only more than 1000 square meters (use area) will be left.

The main store also needs a good brand to be a neighbor, but there is no good shop for other "neighbors" except the area occupied by the main store.

More than 60 thousand square meters of shopping center will be more flexible, can be made into family consumption, one-stop shopping center, in this case, we can consider the introduction of movie theaters and supermarkets as the main force, and we can also find some good clothing brands to be the main store.

Reporters: supermarkets, cinemas, and so on, they give the rent is very low, is not conducive to improving the rate of return on investment.

Yan Sihui: from the market point of view, the boutique supermarket is to adapt to the maturity of the shopping center.

In the early years, many shopping centers in the domestic market have planned large supermarkets as main stores. As the market changes, the owners gradually find the shortcomings of low rent and long tenancy in large supermarkets, and the business model of small profits and quick turnover can not effectively bring high-end high-end customers.

As a result, shopping centers have reduced the size of supermarkets, such as Guangzhou's Zhonghua square and good Plaza. They have replaced large areas of Jusco and Bajia with small area of T A ST E, which has opened up commercial areas to introduce other high rent value businesses, has also increased the rent of supermarkets, and has improved the grades of shopping malls.

Reporter: what if the mall does not pursue the main store?

Yan Sihui: there must be a main store in every mall. Otherwise, other small shops or new brands will be hard to survive, but there can be no major stores like supermarkets, department stores and cinemas.

General commercial property within 40 thousand square meters, or as a community type business, or positioning to achieve small and refined, the number of merchants will not be many, but all around a theme to create projects.

For example, the commercial area of Huarun 1234space in Shenzhen is about 10 thousand square meters, and the imported brands are mainly fashion, delicacy, and young brand.

Retail brands are dominated by fashion apparel, including H, M & G A P and many other international brands.

Restaurants introduce Yuet hot pot restaurant and Hongkong Cui Hua tea restaurant to attract young people's cutting-edge restaurants.

In addition, the shopping mall also introduced a Sisyphus bookshop full of culture and petty bourgeoisie, which further echoed the theme of the project.

Another example is K 11 in Shanghai. Its commercial area is about 40 thousand square meters. The theme of shopping Art Center is retail and catering, and no major leading stores are introduced.

K 11, on the one hand, introduces retail and catering brands that are not included in the business circle. On the other hand, it takes full efforts in consumer experience. Every corner of the shopping mall brings art surprises to customers, setting up more public spaces for customers to relax and entertain.

The design of subway entrance, exquisite farm restaurant and street garden is full of creativity, and has become a selling point for attracting people to enter.

Reporter: is business investment more serious than before?

Yan Sihui: economic downturn, oversupply, electricity supplier impact and other factors, so that investment is more severe than before.

Now it is the market of merchants rather than the market of owners. Some of the main stores are relatively strong. They want to introduce businesses to many shopping malls in the three or four tier cities, but businesses feel that the consumption capacity of these three or four tier cities is not enough. Therefore, some businesses will ask for no rent protection, and some even have to "reverse the bottom" to ensure that they can do much business, and that they can not subsidize the store if they fail to do so.

Merchants are willing to stay in shopping malls for 1 or 2 years. If the stores are not expected to flourish after two years, they will not go to the mall even if they want to get enough decoration subsidies and concessions.

At the same time, these businesses have limited places to shop every year, so they are more cautious, so the demand for cash flow of Party A is even higher.