Secret transaction at World Trade Center failed, excessive volume and overload accelerated the turnover of commercial real estate

Whenever night falls, World Trade Center will experience the peak passenger flow of the day, but this is difficult to translate into effective passenger flow in the mall.

The giant screen of "All Beijing Looks Up" is still bright, but this is no longer a commercial project in Beijing CBD that dazzles brands and consumers. A Beijing Business Daily reporter learned that World Trade Center tried to sell the project and once entered into the financial due diligence process with the intended buyer, but it was temporarily suspended due to the asset issues of the relevant person in charge. In fact, there are undercurrents surging in China's seemingly calm commercial real estate sector. In the context of overloaded commercial real estate, lack of reasonable project planning, and active capital of all types, a reshuffle of the commercial real estate market with disorderly competition is inevitable.

Planning to exit

Today’s commercial real estate is like a siege. People outside the city want to get in, and people in the city want to get out. According to an unnamed person in the commercial real estate industry, there are many commercial projects seeking to be sold this year, and some projects in Beijing's core urban business district are also ready to be sold. The most surprising thing is that the World Trade Center Tianjie project fell apart when the acquisition was finalized. The above-mentioned person said that the Blackstone Group, an American private equity fund company, is the top buyer of the World Trade Center, with a project quotation of about 4 billion yuan. In April this year, both parties entered the in-depth acquisition stage. However, the acquisition was ultimately shelved due to asset issues with the project owner. Blackstone Group has a strong interest in commercial projects in China. Blackstone Group also bid for the Zhongguancun Europe-America Project won by Hong Kong-based Link Capital in March. A person in charge of the mall said that he was not aware of the above situation and the mall has been undergoing adjustments.

A senior commercial project leader told a Beijing Business Daily reporter that if the project owner violates the law or other reasons, the court will freeze its relevant assets to protect the interests of creditors, and the project will no longer be able to continue. Buy and sell. However, when the court launches an auction of the offender's assets, the intended buyer can continue to acquire the property, but will no longer negotiate with the original shareholders, but will negotiate with the court to take over the deal. In addition to the above situations, there may also be problems such as the equity of the project itself being mortgaged. Once equity, debt and other issues are involved, project acquisition negotiations will become difficult, and intended buyers may also withdraw. The reporter called the relevant senior officials of the World Trade Center yesterday, but the other party's mobile phone was always turned off.

In 2007, two blockbuster commercial projects appeared in the Beijing commercial market: World Trade Center opened another door for CBD West District commerce, and Xidan Joy City opened a new era for the Xidan Street commercial market. But now the development of the two projects is very different. Xidan Joy City has become the "myth" of COFCO's internal commercial projects. Relying on this project, COFCO Joy City's product line has been replicated across the country. In comparison, the commercial value of the 250 million yuan giant screen of World Trade Center is still there, but the mall has adjusted its target from focusing on first-line brands and sub-brands to light luxury and then to fast fashion and catering.

A reporter from Beijing Business Daily visited yesterday and saw that the World Trade Center Sky Level was crowded at night, with many families visiting, and some children-related amusement projects popular. Many tourist buses stop in front of the mall, making it a must-visit attraction for foreign tourists visiting Beijing.

However, the popularity of the commercial part, which was split in two by the giant screen, has dropped sharply, and investment has also shifted from high-end brands to fast fashion such as Uniqlo and H&M. The person in charge of the above-mentioned shopping mall said that the recent adjustments of the shopping mall will focus on surrounding communities and white-collar workers in office buildings. A reporter from Beijing Business Daily noticed that there are still many vacant shops in South Street, which is mainly retail, and some of the brands that have been changed are mainly for life services such as beauty and manicure. After the nearby Parkview Green appeared, high-level customers of the World Trade Center Tianjie (Tianjie Building) office building also fell in the arms of others, and many high-end brand conferences also chose it there.

Selling in secret

Due to various reasons such as the group's strategic decision-making, Beijing Business Daily reporters learned that many developers are no longer willing to go through the long process of projects from flowering to fruition and then selling. Although the sell-off projects are not publicly traded on the market, they are secretly rumored to be looking for buyers. This is also an open secret that has formed a tacit understanding in the industry. However, the fruits are not yet ripe, and there are many items being sold at "sky-high prices".

Guo Zengli, director of the China Shopping Center Industry Information Center, said that the commercial market is currently facing very serious problems. The number and area of ??commercial properties that may have exit intentions are increasing in the next few years, but the buyer's market has not amplified at the same time. Many projects for sale will think that the price has reached a high point at this time. Wang Yongping, vice president and secretary-general of the China Commercial Real Estate Alliance, believes that the operation of commercial projects itself is unsatisfactory, but high valuations can be considered based on the prices of surrounding residences and shops. However, the current situation is that there are many sellers with high expectations and few buyers who can take over.

Zhang Jiapeng, executive director of RET, said that many overseas institutions and funds have strong interest in domestic commercial projects. They believe that due to the economic environment, the price of commercial projects is now at a low point. These institutional models and concepts are very mature, their expectations for commercial projects are reasonable, and they will have acquisition intentions. “Overseas capital prefers projects that are already in the early stage of investment promotion or in the late stages of operation.

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Overseas capital represented by the Blackstone Group of the United States, Carlyle Group and some funds in Singapore have invested more in the Chinese commercial market. However, some senior business people said that the overseas institutions participating in the bidding are more from the capital level. Considering that many assets to be listed must be packaged with commercial projects, this also requires them to identify some potential commercial projects. From this perspective, it is not business itself that drives the commercial market to the current situation, but capital. The lack of strength and planning is the main driving force.

The reshuffle is coming

In the transition period between department stores and shopping malls, World Trade Center can be regarded as the successor to Oriental New World and Jinyuan New Yansha MALL. After that, the earlier batch of shopping mall divers, however, in the continuous changes in the commercial market, the partners in the same period have entered a period of steady growth, but after many rounds of exploration, World Trade Center gradually fell away from the mainstream echelon.

In Wang Yongping’s view, with commercial real estate planning out of control, homogeneous competition has intensified, and the static advantages of earlier commercial projects (surrounding customer groups, location selection, etc.) have been seriously weakened, and new projects have emerged one after another, and the commercial market has become a cake. are gradually diluted, and projects with advantages can be evenly matched, while projects lacking characteristics are faced with being eliminated.

There are many commercial projects similar to what World Trade Center has encountered, and most of them attribute the reasons to the slowdown in the growth of the consumer market and the impact of e-commerce. , but the essence of the return is due to the lack of planning that leads to excessive project volume. At present, the commercial planning of China's market areas is not detailed, and excessive development has slowly cooled down a lot of hot money that flowed in during the downturn in the residential market. Guo Zengli said that those who can enter this field. Investors can already feel that business cannot make quick money. Commercial real estate aims at long-term sustained returns. When funds cannot be withdrawn quickly, returns are low, and continued investment is required, many developers lose their enthusiasm and patience with domestic large companies. Compared with the immature concepts and models of most developers, foreign groups such as IKEA and Swire are more stable. This kind of development strategy based on market demand is more long-term. Only mature commercial properties have more room for appreciation.