Where Are The Business Opportunities Of The Three Or Four Tier Cities In The Pformation And Upgrading Of Traditional Business?

Three or four tier cities have very good opportunities for commercial real estate, especially the new commercial real estate based on shopping centers.

The three or four tier cities account for 53% of the national urban population, but the shopping centers in the three or four tier cities only account for 16.5% of the national urban shopping centers. The number of shopping centers in the three or four tier cities is small, and the consumption mode needs upgrading urgently.

Xu Huafang, President of Baolong Group, said in an interview with the Economic Observer newspaper that today, the commercial real estate development of different cities has entered different stages. The development of the second tier cities has become more refined and characteristic. For example, because of the continuous extension of urban development and the emergence of regional centers, community businesses are more popular. Because of the fierce competition of the complex, shopping centers with distinctive characteristics are more popular with the market, and the motive force for the development of commercial real estate in the three or four tier cities lies in business.

It is in the development state of "changing the old relatively backward business".

"Reviewing the development of commercial real estate in China over the years, there is still a lack of quality complexes and shopping centres in the market."

Xu Huafang commented.

According to the research data of Jones Lang LaSalle, it is estimated that only 83 million of the total shopping centers that have been built in China have reached 10%-15% in line with international property standards, which is in sharp contrast to the total number of similar properties in the US 405 million square meters. In other words, in the United States, on average, every 1000 people have 1500 square meters of retail property area, while China has 1000 square meters of land for every 1000 people.

Ouyang Jie called the next 10 years "the last opportunity": "take a three line city as an example, the average population of the three line cities is 5 million 200 thousand. According to the urbanization rate 50%, 2 million 600 thousand people are in the city, a shopping center covers 200 thousand people, it can cover 130 shopping centers, all the 1234 cities are counted, and the country can reach about 6500 shopping centers. Now there are 4700 shopping centers, and the construction of shopping centers may not be more than twenty years. Our ceiling is coming."

But he repeatedly stressed that three or four line cities must be noted.

Risks and pitfalls.

In his view, these pitfalls include: first, it is hard for new cities to have spring again; second, the growth rate of urbanization is slowing down, and the growth of urbanization is difficult to achieve in the three or four tier cities. The opening of shops is very difficult, and even investment is very difficult. Third, the main shops will lead to lower return on investment, while the main brands of famous brands can bring tourists, but they need more decoration subsidies, and at the same time there is a rent free period. Therefore, reducing the rate of return, especially for some large supermarkets, is very inefficient and wastes a lot of resources. In the fourth place, the electricity supplier can diversion or diversion.

Investment difficulty

Low return is indeed the trouble of commercial real estate in the three or four tier cities.

Through comparison, the research center found that the price of the same brand in the three or four tier cities is only about 60% of that of the second tier cities.

The greater risk comes from the development trend of the whole market.

The data of Ying Shi Group Research Center show that in the first half of 2015, the stock of commercial property in China's 20 largest cities exceeded 97 million square meters, of which the second tier cities accounted for 63%. By 2018, new supply of 61 million 460 thousand square meters is expected to continue to open in the market, accounting for 63% of the existing stock, while 58% of the new supply will be opened in the non core business circle of the second tier cities. The stock and future supply pressure will coexist, and the risk of business and investment pressure will go up.

Ying Shi Group Research Center for a survey of 124 cities nationwide showed that in 2015, China's commercial property market confidence index increased 10 points to 124.8, indicating that the market was further optimistic. Among them, the first tier cities achieved the highest value 129.1, the three line cities were 123.2, and the three line city's market confidence index and consumer's desire growth expectations have exceeded the second line.

In addition, according to the data of the five fast fashion brands (UNIQLO, ZARA, H&M, C&A, GAP) tracked by Ying Shi Research Center, the three line cities have become the hot spots of the fast fashion brand market expansion. In the five fast fashion new stores in 2014, the number of newly opened shops in the second tier cities exceeded 3 times that of the first tier cities, and the three line cities accounted for the highest proportion.