Traditional Retail Commercial Real Estate Bubble Worries

Reporters recently found that China's most economically developed Yangtze River Delta region's commercial projects are facing oversupply.

Some commercial real estate projects are in poor condition, some have fallen into a miserable dilemma, and a lot of land is in inefficient use or even idle state. Some of the capital crises caused by some projects have affected the real industry.

Jones Lang LaSalle data show that from 2014 to 2016, the new supply of quality shops is expected to reach 23 million 700 thousand square meters, which is 59.5% of the stock in 2013.

The development of some two or three tier cities in the short term is too large, especially those located in non mature business circles and developers who do not have the experience of shopping arcade operation. The market vacancy rate may continue to be high for some time to come, and the investors concerned will get bogged down in the mire.

The industry believes that before launching a commercial project, we should consider various factors scientifically and plan.

Hu Yalong, President of Shanghai Federation of enterprises in Shanghai, said that it is necessary to rationally develop large commercial real estate projects in line with the expected population size, regional traffic and industrial linkage, so as to achieve better coordinated development with the modern service industry, rather than making decisions on the head and making it a "performance project".

In addition, projects that have proved unsuitable for the continued development of commercial real estate should be studied to promote the utilization of land.

Chen Denghua, chairman of China Development Group, suggested that for such projects, land could be revitalization through the government's repurchase and storage, land denaturation and change of project purposes.

Today, urban complexes and shopping centers have sprung up in just a few years, replacing traditional large department stores.

In the future, the development trend of commercial real estate in cities is to increase the value of commercial assets through special operation and upgrading services.

"With the rise of the middle income class, consumers are becoming more mature and have a broader consumption demand and taste style. This means that China's retail commercial real estate needs to enhance the consumer experience and introduce an innovative sustainable development mode."

Deng Rushun, director of retail real estate in Greater China and Shanghai, said.

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For example, the new shopping idea of Hongkong's Sun Hung Kai real estate, which is "nocturnal consumption", aims to attract customers in the fierce market competition by changing atrium decoration and hosting fans' meeting.

Also worth mentioning is that its soft services are also in place.

If during the trial operation, the security personnel will be timely.

Provide guidance, toilet cleanliness and other services to reflect the continuity of management.

Reporters also found that new business centers pay more attention to themselves.

Vigorously developing purposeful and experiential consumption, such as the introduction of a large number of new brands into the Kerry Center of Jingan, Shanghai, has also opened some new entertainment formats.

At the same time, the proportion of catering business in many shopping centers has risen sharply.

Under the joint action of new brand and catering entertainment, consumers have defined the location and advantages of shopping malls.

In addition, there are many traditional retail properties choose to develop the online platform to deal with the impact of the electricity supplier. Taking Huijin department store in Shanghai as an example, the construction of the online platform began to begin at the beginning of the impact of the electricity supplier.

After two years of preparation, it has now been officially expanded from traditional physical department stores to online e-commerce providers. Cooperation with websites on Xujiahui mall, Tmall, Jingdong and other websites has also accelerated the pace of supplier development to online.