Commercial Real Estate Developers Have Turned Their Attention To The Three Or Four Tier Cities.

The oversupply and homogenization of commercial real estate has long been the consensus of the industry.

In 2014, a survey of commercial property market in 35 large and medium-sized cities showed that commercial real estate oversupply in 19 cities such as Yinchuan, Hohhot, Shenyang and Chengdu.

But many developers of commercial real estate have turned their sights on it.

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In December 18, 2015, a large complex project with a total volume of more than 400 thousand square meters was officially opened in Putian, Fujian province. Data show that the day attracted 468 thousand people, and the total turnover was 38 million yuan by the end of the day.

The developer of the project is the Fujian housing company Jung group, which is about to move its headquarters to Shanghai.

The project, known as the Putian Jung wealth centre, is defined as the benchmark project of the commercial strategy set up by Jung Jung. Subsequently, the Jung Fortune Center will continue to land in the cities of Ma Bao, Mawei, Nanping and other cities in Fuzhou, while the Jung Changsha wealth centre and Xi'an Jung Rainbow Valley will also open in the near future.

The above layout areas are two or three or even three or four line cities.

Huang Xianzhi, director and President, said that 10 shopping centers will be opened in 3 years and 30-50 shopping centers in the next 5-10 years.

Zheng Rong is not alone.

Xincheng Holdings has accelerated the pace of expansion of commercial real estate in recent years, and clearly stated that commercial real estate will focus on three or four line cities, with at least 10-15 new commercial projects every year. In 2017, 40 commercial projects were developed. By 2020, the number of commercial complexes and 80 projects in construction has reached more than 80.

Jia Kai City is more sinks and chooses to develop commerce in economically developed small towns. The first city living room is located in Dian Kou Town, Zhuji City, Zhejiang. It plans to invest 60 billion projects in 3 years.

In order to establish a competitive advantage in the three or four tier cities, Cheng Rong has set up a "star glory" program to provide investors with asset trusteeship, leasing proposals, consumer tracking and decision support. The plan will be upgraded and applied to the commercial complex of the Jung group.

It is understood that Zheng Rong already has a business management team composed of nearly 200 domestic business elites and is fully responsible for the investment promotion and follow-up operation management of its projects.

In addition, there are more than 3000 well-known brands at home and abroad to reach a strategic alliance with the Jung group. The brand resources cover five major consumption areas: Fashion catering, international luxury, life entertainment, boutique retail, and parent-child paradise.

In addition to Zheng Rong, the newly pferred B to A has also invested heavily in the layout of the three or four tier cities.

Wang Zhenhua, chairman of Xincheng holdings, told the Economic Observer newspaper that he hoped to enter the first tier of commercial real estate in about 5 years, and that the proportion of commercial real estate sales in the future will increase year by year.

New town hopes to quickly seize the three or four line cities, up to now.

6 commercial projects have been opened, and another 15 commercial complex projects are being planned and constructed.

It is understood that in order to give commercial blood pfusion, the first commercial asset securitization product of Xincheng is expected to be listed on the Shanghai Stock Exchange soon.

It is worth mentioning that for these housing enterprises, the three or four tier cities are not blindly layout, economic capacity and consumption capacity are two important indicators.

Taking Jia Kai City as an example, in order to reduce investment risks, the Zhejiang city commercial group of Zhejiang city established the city development data Research Institute of Yangtze River Delta to build a database of the Yangtze River Delta town. It has a set of strict site selection criteria: what kind of town, how many people, how much financial revenue, how much disposable income per capita, how much retail consumption index, how big projects can be built, and the data are based on data.

Many industry insiders told the Economic Observer newspaper that the opportunities for commercial real estate in the three or four tier cities lie in the pformation and upgrading of traditional businesses, and some cities urgently need better quality experiential shopping centers.

However, it is undeniable that the pressure of commercial oversupply remains intact.

According to the findings of CB Richard Ellis, in 2014, the total shopping center in the world was 39 million square meters, of which, the shopping mall in the Asia Pacific area was over 32 million square meters, and more than 60% of the shopping center was in China.

China occupies nine seats in the world's ten most active shopping mall market rankings.

For the housing companies such as Zheng Rong, there is no shortage of warning.

Baolong real estate, once a large-scale layout of three or four line cities, has returned to the forefront since the end of 2013. In 2014, half of the investment was put into Shanghai, but the pformation effect was not obvious.