Chen Ziwei, General Manager of CapitaMalls Commercial North China
You stand on the bridge and look at the scenery, the people who watch the scenery look at you upstairs, the bright moon decorates your window, and you decorate other people's dreams.
In the field of commercial real estate, CapitaLand is known for its professional operation and management, since entering China, CapitaLand has landed many classic cases in capital operation and fine operation, providing the industry with a lot of experience and models to learn from, which is really "decorating the dreams of others". However, it is always used as a reference, comparison and imitation, but it seems that no developer can really learn the essence of the CapitaLand model.
The so-called CapitaLand model, that is, the projects that are invested in development or acquisition are packaged into private equity funds or trust funds, and they hold part of the equity of the fund, and the other part of the equity is held by overseas institutional investors such as pension funds and insurance funds. After the project operation is stable and the asset appreciation is realized, it will be exited in the form of REITs, so as to carry out circular investment.
On 15 July 2006, CapitaLand's first commercial real estate project in China, Wangjing Mall (officially renamed "CapitaMall Wangjing" after 2011), was officially opened, becoming the first one-stop shopping mall in Wangjing that integrates shopping, dining, entertainment and leisure. With this as a starting point, after ten years of strategic layout and expansion, CapitaLand's shopping malls have spread throughout the east, west, south and north of Beijing.
In more than 20 years since entering China, CapitaLand has transformed from an "alien monk" to a well-versed in the operation rules of China's commercial real estate, and has successfully operated a number of shopping malls, complexes, office buildings, serviced apartments and other commercial properties step by step. He has rich experience in the selection of investment targets, the upgrading of hardware facilities, the promotion of intelligence, and the adjustment of brand formats. In contrast, local developers are still lacking in the precision and professional operation of commercial real estate. Especially under the impact of e-commerce and the competition pattern of commercial real estate in the Red Sea, it is even more stretched.
So, what is the logic of CapitaLand's layout of Beijing for more than a decade? How does it break through the operation of shopping malls in the fierce competition? Recently, Real Estate China Interviewed Chen Ziwei, General Manager of CapitaMalls Commercial North China. Since participating in the acquisition of CapitaLand's first shopping mall in Beijing, he has experienced the landing, development and maturity of a number of CapitaLand shopping malls in Beijing.
Real Estate China Network: Ten years ago, how did CapitaLand look at Wangjing, a seemingly uninhabited area, to land its first shopping mall in Beijing?
Chen Ziwei: Indeed, in 2004 and 2005, wangjing, the business and community atmosphere was not yet fully established. At that time, it was not as convenient as today's transportation, and I remember that every time I took a taxi from the airport highway out of the fourth ring road, I had to go through a large part of the coal sand road to reach the location of the project.
Despite this, CapitaLand had already taken note of the investment opportunities in Wangjing, as multinational companies such as Nokia, Siemens and Motorola had already set up offices in the region.
Wangjing is positioned like Singapore's Tampines, that is, "sub-CBD", without paying the high rent of CBD, but can enjoy the resource advantages of CBD. Singapore's Tampines has been very successful and we think Wangjing is moving in that direction. We conducted multi-faceted research through field visits, understanding from peers and the public, and studying market data, and saw the investment trend of Wangjing as a whole.
Real Estate China Network: Now that you have been operating shopping malls in Beijing for more than ten years, how do you think the current commercial real estate operation is different from that of ten years ago? What are the biggest challenges? Is there a clear sense of crisis?
Chen Ziwei: The whole market is more mature than it was a decade ago, and the competition brought about by the operating environment is becoming more and more intense. From our point of view, refined management is becoming more and more important. From the tenant's point of view, they have entered an era: choosing a shopping mall to open a store can no longer only consider the location and rent, but also need to consider the whole market, does the landlord understand the entire market? What is the business model of the owner? There is generally a 3 to 5 year cycle to open a store, the upfront rent may be more critical, and how to attract customers in the later period is the core. In the subsequent operation, whether the shopping center can help the store analyze the needs of the customer group and promote it accordingly is the key to the success of the brand.
We do business as a long-term business to run a shopping mall, not just to attract business, fill the bunks, get a high occupancy rate and sloppily find tenants to come in, this is not our business philosophy. We will choose the best combination of formats and the most suitable brand to join our mall to serve everyone.
In fact, the relationship between landlords and tenants is increasingly a partnership, not just party and party B.
Personally, there is definitely pressure. However, in the whole process of competition, the overall level of the market is improving, as long as we ensure that we are in the high-quality range, the improvement will be more obvious. For ourselves, how to improve our own advantages in this environment, in the competition to let customers know that we are the right choice, is very necessary.
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Real Estate China Network: CapitaMal Wangjing has been in the past ten years since its opening, and we have seen that in the past ten years, shopping malls have been constantly renovating and upgrading from internal formats, hardware facilities to external facades. Is it because of the needs of customers and tenants? Or do you adjust one step ahead?
Chen Ziwei: From a management point of view, we take the initiative to adjust with a positive asset management concept, and we will not wait until the time when the tenant feedback information is made, which is too passive.
The first is to understand the market and understand what role our mall plays in the hearts of our customers. It's something that needs to be done frequently and continuously. Every year and every month, we will carefully observe the performance of each format and each shop in order to better understand which formats and brands are doing better, what is the trend in the market, which brand is in the rising cycle, which brand is declining, and so on. We hope to seize the opportunity point of rising brand, communicate closely, and give full play to the advantages of the brand.
In addition, we will do some updates on the software and hardware of the mall every year, so that consumers can see the new changes in the mall every year, which is also our management philosophy, do not wait for others to be tired of changing.
Real Estate China Network: Residential profits will double as prices rise, but rents in shopping malls will not rise so quickly. From the investor's point of view, even if the mall is operating well, it still needs to create value-added points every year, how does CapitaLand do it in this regard?
Chen Ziwei: From the perspective of asset management, every year we analyze where the growth opportunities are and where the space is. For example, the Wangjing project, the lease signed ten years ago, some five or six years due, some three years due, at different stages will give us the opportunity point, we have to seize.
At the same time, some tenants will adjust themselves according to the demand for area and rent pressures of their own brands. In the past, the rent was low, and the owner's requirements were not high, but with the increase of rent, the owner's awareness of this efficiency will become more and more intense. As operators, we are also studying how to adjust and compress some large areas, or inject more format content into the same area. This is another way we create value-added points.
Looking back, our assets have been growing steadily over the past decade, and now our revenue and return on investment have basically doubled.
Real Estate China Network: Now that CapitaLand Commercial in Beijing is very mature, what is the next expansion plan in the new area or other areas?
Chen Ziwei: Beijing is capitaland's strategic focus and one of the first cities for CapitaLand to complete the full business chain layout, and our business in Beijing includes complexes, shopping malls, office buildings, serviced apartments, etc. In recent years, the amount of investment and energy we have invested in Beijing has definitely increased. But we will follow the market and grasp the best opportunity points, rather than being blind investors.
Our investment approach in Beijing is also flexible. In the past ten years, you can also see that we have taken land, acquired properties that have only reached half the construction period, and also acquired completed properties or commercial projects that are already in operation. Therefore, CapitaLand has the ability to use its own funds, funds held or trust funds to look at the status and situation of different projects at different stages to decide which way is more appropriate to expand.
As cities expand, so do our investment opportunities, which is natural. If there is an opportunity point in the fifth and sixth ring roads of Beijing, we will definitely actively seize it.
Real Estate China Network: Does CapitaLand have any other strategic deployments besides traditional shopping malls?
Chen Ziwei: In terms of macro, the market has been changing, and CapitaLand Group is also making strategic arrangements to keep up with the market situation. For example, some of CapitaLand's businesses are integrated with external resources, and ascott's partnership with Tujia is a good example. Now is the era of the sharing economy, only by adopting an open attitude can we achieve a win-win situation. In addition, we will also step up cooperation with brand owners and find suitable opportunities to reach strategic cooperation with suitable brands. This cooperation may be in the investment or management aspect.
Real Estate China Network: The operation of the New Town Shopping Center has always been a problem faced by everyone, you have many years of operating experience, can you give some suggestions to the industry? In the case of a business district atmosphere is not perfect, how should the shopping mall operate?
Chen Ziwei: In the case of the immature business circle in the whole business circle, we must put the project expectations in the long run. At the beginning of the project, we must do the most basic things well, through two or three years of training, and then make adjustments. Because when the occupancy rate of the customer group enters a new stage, the release point of their consumption will change, and some new demand will be generated. Therefore, I think that the shopping center operation of the new city should be divided into several stages, first doing the foundation, and then doing further management and optimization of the brand. Only when the brand and popularity are loud can we attract more customers.
Real Estate China Network: As a consumer, what aspects of details do you like to observe when you go to the mall?
Chen Ziwei: Hardware things are easy to build, I pay more attention to service, I think there is still room for improvement in the service level of many shopping malls. We want to sell things more expensive, we want the rent to continue to increase, in this case the owners and consumers will be more discerning, they will put forward higher requirements and expectations for service. Therefore, improving the quality of service is the development trend of shopping malls.
Real Estate China Network: In order to cope with the impact of e-commerce, many physical stores are adopting the O2O model. How effective do you think O2O has been on shopping malls changing the status quo?
Chen Ziwei: CapitaLand has been working hard to build intelligent hardware facilities, create Internet big data, and bring online consumption habits and various conveniences into physical stores.
On the one hand, CapitaLand Shopping Star 2.0 effectively integrates CapitaLand's membership resources, fans can easily get various benefits and benefits on the mobile terminal, and also connect with the intelligent parking system, consumers can exchange points for parking coupons, pay parking fees with WeChat, and reverse car search through smart terminals.
On the other hand, CapitaLand is also integrating with external resources, actively seeking cooperation points with Baidu, Alipay and WeChat, and has now cooperated with Baidu.
In terms of data, we have established a consumer database to collect basic consumption data such as passenger flow, consumption frequency, focus brand, gender and age distribution. The next stage of work is to deeply interpret this information, extract strategies and perspectives that are helpful for brand communication, and provide more operational guidance for tenants in the mall.
Real Estate China Network: Recently, many shopping malls have adopted IP operations, what do you think of this phenomenon?
Chen Ziwei: From the perspective of activities, IP is definitely good for shopping malls, because it can greatly enhance consumers' attention to shopping malls. What we need to pay attention to is how to make this effect last, rather than become a one-time act. I'm also concerned about the coherence between this IP and the theme created by the mall, and whether this theme can bring more opportunities to the mall.