Liu Deyang Explains The New Hung Kai Property Reentry Into Hangzhou: The Sustainability Of Mainland Investment Is Closely Related To The Urban Group Development.

In November 28th, Sun Hung Kai Properties won the largest commercial site in Hongkong in recent years, with a record of HK $42 billion 200 million for commercial sites in the West JiuLong Railway Station of Hongkong.

Back in the mainland, the real estate giant in Hongkong has also worked very frequently in recent two years. Since 2018 and 2019, two commercial blocks have been put into the Nansha Guangzhou Sheng Sheng hub area since February 20th and the total floor area is about 307 thousand square meters. It is the first Hongkong developer who has obtained large comprehensive commercial land in Tai Wan area since the development plan for Guangdong Bay Hong Kong Bay area was released in February 20th this year.

In August of this year, Sun Hung Kai Real Estate launched Hangzhou again in ten years. With the joint venture of real estate, 13 billion 260 million yuan won Hangzhou's newest high price - River remittance.

A few days ago, Liu Deyang, executive director of Sun Hung Kai properties (China) Limited, accepted an exclusive interview with the economic news reporters in twenty-first Century, and analyzed the strategy of Sun Hung Kai estate to develop commercial real estate in the mainland.

According to industry analysis, compared with Beijing, Shanghai and other first tier cities, as a strong second tier city of Hangzhou, its commercial real estate development slightly lagged behind. The previous Kerry Center experienced 10 years of dormant period, and has been slightly improved in operation in recent two years; Hangzhou's local commercial brands began to decline.

With the international events such as the G20 summit and the Asian Games held in Hangzhou, Hangzhou's status has been improving. Hangzhou, which starts late in commercial real estate, also needs developers with international vision to participate in urban construction.

On important plots, the Hangzhou municipal government has consciously introduced internationalized enterprises. The domestic housing enterprises have a simple development and sale mode, lack of management ability, and there are many gaps between Hangzhou's idea of "city cover" works and the mode of developers in Hangzhou. This is also the reason why Hong Kong's capital has begun to pay attention to Hong Kong. Over the past year, Hong Kong funded enterprises have invested more than 40 billion in Hangzhou. In addition to Sun Hung Kai properties, there are new world and Hang Lung real estate.

However, Hangzhou's current consumption capacity needs to be improved. Hangzhou's high-quality landmarks type large urban complex is still lacking. Hangzhou, which has gradually entered the development cycle of the commercial complex, is filling the gap of the city. The territory of the new Hongkai property is very special. The total area of the block is about 836 thousand square meters, which is located at the junction of Qian Tang and the Grande Canale, and is divided into two parts by the canal. If the Mixc is the landmark of the 1 era of Qianjiang New Town, then it will be a node in the 2 era of Qianjiang new town.

New round of urban development opportunities

Is it a landmark event for Sun Hung Kai properties to invest in the mainland? Liu Deyang admits that Sun Hung Kai estate has been paying attention to Hangzhou for a long time and is not the first to enter Hangzhou. In 2005, Sun Hung Kai estate cooperated with Huarun group in the Mixc, Hangzhou. After the opening of the project, the turnover continued to rise, which determined the decision of Sun Hung Kai property to further enter Hangzhou. Hangzhou has been doing well in recent years, and the G20 summit is being held here. The Asian Games will also be held in 2020. Hangzhou's urban framework has gradually opened up with these two international events.

Liu Deyang said that Sun Hung Kai properties did not want to miss the new round of urban development opportunities in Hangzhou. Meanwhile, Sun Hung Kai estate investment team continued to see projects in various places, including Beijing, Nanjing, Chengdu, Shenzhen and other cities. Because many large cities in mainland China, from the local government planning to plots officially launched, it takes 2-3 years, so Sun Hung Kai real estate investment team to see the market in 2-3 years as a cycle. Liu Deyang pointed out that in terms of project acquisition time, developers often need to make investment adjustments according to the pace of urban planning development.

In the past two years, Sun Hung Kai properties have been actively watching in Hangzhou, and finally their eyes are on Qianjiang new town. The government hopes to make a weighty piece of work, so the enterprises who have strong design concepts and management capabilities hope that this project will continue to be a landmark rather than a short and fast project.

The most important thing for the Hangzhou government is that the business sector of Sun Hung Kai estate's commercial projects in the mainland is self-sustaining, which is sustainable for the development of the project. One big background is that the country is stimulating domestic demand and encouraging consumption. Sun Hung Kai estate has also seized this development opportunity: in Hongkong, Sun Hung Kai properties, including the Victoria Harbour porch, and many century landmark complex projects have been developed, and many well-known complexes have been built in the mainland. The complex projects that they are good at have gathered business and rental modes, and have also set up shopping centers, hotels and hotel apartments, office buildings and other formats, which is compatible with the consumption environment.

Liu Deyang pointed out that although River exchange is one of the largest complex projects of Sun Hung Kai Property in the mainland, there is no operational challenge, because almost all major complex projects of Sun Hung Kai properties have entered the operational stage of the ideal (profit) in the mainland (the ITC project in the prosperous section of Xujiahui, Shanghai will be completed in 2023).

It is revealed that the river is still in the optimization stage of conceptual design. Sun Hung Kai estate's operation team has been studying the development and impact of the new retail line on the real economy. In this project, many new technologies, such as lighting and digital technology, will be used to enhance the business experience of customers.

The huge scale of the river remittance project will have an impact on the investment of the Sun Hung Kai Property in the near future in China? Liu Deyang pointed out that every market has cycles, and developers are looking for investment opportunities in this cycle. Sun Hung Kai property is no exception.

Investing in Urban Agglomerations

Liu Deyang pointed out that the urban conditions and objective environmental policies, coupled with the steady growth of China's economy, continued to be optimistic about the mainland market.

The process of urbanization in the mainland has been steadily advancing, and has developed from individual cities to urban agglomeration. The investment focus of the team is not on a city, but on the urban agglomeration. Therefore, Sun Hung Kai estate has paid great attention in the big bay area and the Yangtze River Delta. Liu Deyang believes that the recent development of urban agglomeration policy promulgated by relevant departments is encouraging enterprises to participate.

"The mainland market is huge." Liu Deyang pointed out that investment in the mainland depends mainly on the direction of policy. It depends on where a big policy is implemented, and the speed of each place is different, and it has its own economic and business environment. Therefore, in such a big environment, enterprises have to judge the effect of policies when they are implemented in different places. At present, Sun Hung Kai estate has a layout in key cities of Yangtze River Delta, such as Shanghai, Hangzhou, Suzhou, Nanjing, Nansha, Guangzhou, Nansha and other key cities in Guangdong, Hongkong and Macau.

Taking Hangzhou as an example, Liu Deyang is a provincial capital city and a tourist city, which has strong consumption power in itself. In addition, the city is dominated by new industries such as the Internet, attracting many young people to live and work here, gathering a lot of frontiers, as well as transportation, culture and other hub effects. Therefore, Sun Hung Kai estate must consider comprehensively when making projects.

Shanghai is also a different city. It is on the same name as Tokyo, New York and other metropolis. The construction of the "five centers" of the international economic, financial, trade, shipping and science and technology innovation centers is advancing in depth. The commercial complex of this city is very large and needs to reflect the multifunction and diversity of the city. The group has 5 commercial complexes in the core area of Shanghai, which is matched with the scale and demand of urban development.

At the same time, the rise of the Internet, new business and new retail business has put forward new requirements for the operation of urban complex, including online and offline linkage, and making use of public space to create more scene experience.

Sun Hung Kai estate will measure total investment and risk control when making investment. Frequently, 100 or 20 billion of the amount of money to developers is the most important. At present, facing the economic downturn, there are also unstable factors in the global economy. But reverse thinking is also an opportunity. For example, in the past few years, domestic GDP growth has maintained a 6% growth rate. The industry has grown from ten years ago to the light industry, and now the emergence of new industries such as high-tech, e-commerce, AI and other industries has achieved industrial upgrading.

Sun Hung Kai property values long-term returns. Therefore, the business environment and policy stability of a country or region is the most important investment factor for developers.

Liu Deyang pointed out that China is superior to other countries in terms of market stability. "The stability of domestic business environment is a key investment factor. In the global market downturn, we are more competitive than other countries. Because our industrial base and manufacturing base are very good, at the same time, we have higher requirements for the competitiveness of enterprises. Liu Deyang believes that when the global economy is not good, China's competitiveness is reflected.

In October 23rd, the World Bank released the global business environment report 2020. The report shows that China has been one of the ten largest economies in the world with the biggest improvement in business environment for two consecutive years, scoring 77.9 points in 100 points, 4.26 points higher than last year, and ranking thirty-first in the world, 15 higher than last year.

Liu Deyang said that Sun Hung Kai estate will continue to pay attention to market changes and combine the development strategies and capabilities of the group to develop projects in a sustainable and innovative way. The overall business resources need to be looked at in a holistic way. Liu Deyang stressed that whether in Hongkong or in the mainland market, this process is constantly changing and adjusting.