Nowadays, home furnishing stores have begun to transform into shopping malls. Recently, Red Star Commercial, a subsidiary of Red Star Macalline, said that Red Star Commercial may realize the plan to open 100 shopping centers by 2020 by transforming some Red Star Macalline home stores.
Open up new markets in response to adjustments
As early as 2008, Red Star Macalline has been involved in commercial real estate. Up to now, Red Star Commercial under Red Star Macalline has developed 27 complex projects in 21 cities in China.
Recently, Red Star Commercial's official website showed that in the next five years, Red Star Commercial will accelerate the pace of commercial real estate investment, develop and deploy in multiple cities across the country, and strive to build 100 Aegean shopping centers nationwide in 2020.
Earlier, Red Star Commercial had publicly stated that 60% of the 100 Aegean Shopping Centers that Red Star Commercial opened in 2020 will be completed by transforming properties such as Red Star Macalline Home Store.
For the reason of this large-scale entry into the commercial real estate field, Red Star Macalline Group publicly emphasized that this is only the group's initiative to "open up" new business areas. Commerce and Home Furnishing are two completely independent companies. This is not a strategy. During the transformation, there will not be any plans to give up and reduce the home sector.
In fact, in addition to Red Star Macalline, some large-scale home stores are either preparing or are entering commercial real estate. The relevant person in charge of Juxinmei Home Furnishing, a large home furnishing store in Chongqing, once said that the company is also planning to enter the field of commercial real estate. And another large-scale store Meimei Home Furnishing, its parent company Meimei Group has built an urban complex project in Huayan New City has now opened.
Is it a good way to develop commercial real estate
Why have home stores transformed into commercial real estate? According to data released by the China Building Materials Circulation Association, the National Building Materials Home Furnishing Boom Index (BHI) was 123.22 in October, down 7.07 points year-on-year. The cumulative sales of building materials and furniture stores above the national scale from January to October amounted to 1.034 trillion yuan, down 0.50% year-on-year.
Last year, the annual sales of the furniture and building materials industry was about 200 billion yuan. At present, the total area of ​​home furnishing stores has exceeded 40 million square meters, of which 50% of the store area is surplus.
Qin Zhanxue, executive vice chairman of the China Building Materials Circulation Association, said that the recent real estate regulation and control policy is being strictly adjusted, and the building materials home furnishing market will inevitably be directly affected in the future, and the industry trend is also full of variables.
Zheng Yujie, a senior researcher at CIC Consulting, said that the current home furnishing industry has phenomena such as overcapacity and homogenization of products, which cannot meet consumer demand well, and industry adjustments will continue.
Qin Zhanxue believes that the development of commercial real estate is not the main way out of home stores. According to his analysis, most stores still have to start with service upgrades and changes in sales models.
According to a report by Deloitte and the China Chain Store & Franchise Association, as of the end of 2011, the total number of shopping centers in China has been 2,812, but by 2015, this number is expected to reach 4,000. Zheng Yujie said that domestic commercial real estate has already shown a surplus in some regions; although the commercial real estate operation model has changed to "combination of rent and sale", the actual situation is still "sale", indicating that the mode of operation is not mature enough.
According to survey data from RAND Consulting, the rental income of commercial real estate held by Chinese listed real estate companies generally accounts for 3% to 5% of their annual total operating income, while operating profits are mostly negative, especially shortly after opening More than 80% of commercial real estate is in a loss period. (Editor: Peter)
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