Solution | The difficulty of Tian Senhui and the asset-light business of "white knight" Wang Jianlin

In the past few decades, "one shop and three generations" is the investment concept that ordinary people believe in.

In people's view, a good shop can not only earn money every day, but also maintain and increase in value, and even in the years when the real estate industry has developed rapidly, this law still applies.

However, under the influence of multiple factors such as e-commerce impact and product homogenization, commercial real estate seems to be no longer beautiful, and in recent years, news of the transfer and closure of department stores and shopping centers abounds.

According to the latest news, recently, the Shanxi Xinzhou Tiansenhui Project issued a notification letter to relevant partners, mentioning that the project was affected by the new crown epidemic at the beginning of its opening, resulting in serious losses in 2020 and 2021 and unable to continue to operate.

At the same time, the Xinzhou Tiansenhui project mentioned that the company has formally signed a custody agreement with Wanda Commercial Group, which will fully take over the project in March and plans to officially open in July.

It is undeniable that through this trusteeship, the Xinzhou Tiansenhui project may be revitalized, and Wanda Commercial Management can further expand the layout of asset-light.

At a time when the industry is saturated and the competition is fierce, how many people can buy asset-light accounts?

The difficulty of Tian Senhui

Around 2008, compared with the sluggish development of residential real estate, commercial real estate has a trend of "going against the market and thriving", and investment has also poured in in in the case of the continuous refresh of the rent of shops and office buildings.

However, the world is unpredictable, in the past two years, the trend of shop investment has long changed, and some people even jokingly call it "three generations for one shop" or the current reality.

Recently, shanxi Xinzhou Tiansenhui project announced the suspension of business, because the project has been in a serious state of loss since its opening.

It is understood that Xinzhou Tiansenhui City Shopping Park is the largest commercial complex project in Xinzhou City built by Shanxi Tiansen Group at a cost of 1 billion yuan.

According to the official introduction, the Tian Senhui project takes family experience, tourism experience, cultural experience and modern urban lifestyle as the theme, and pioneers the "One Belt, Five Hearts and Seven Scenes" scenario-based commercial experience, that is, to guide the flow of customers to shop and consume with an active line, five theme squares interspersed with projects, to create a professional polar aquarium, outlet outlets, five-star giant screen cinema, Xinzhou on the tip of the tongue, children's carnival, fitness beauty, youth creative market seven scene themes, after completion will become full of experiential, entertaining, interactive, A one-stop shopping and consumption center with cordiality.

However, Tiansen Group did not hand over an answer sheet that satisfied consumers.

On the one hand, the Xinzhou Tiansenhui project opened on June 29, 2019, and encountered the new crown virus epidemic before completing the soft opening, followed by two years in 2020 and 2021, the project has not reached its business objectives, and even suffered serious losses. The company mentioned in the notification letter that the project can no longer continue to operate.

On the other hand, the viewpoint new media review of the public reviews found that some consumers commented on the above projects: Tian Senhui's popularity does not seem to be as popular as the next Daxin City (opened in 2017, it is the first urban commercial complex in Xinzhou), it may be that Tian Senhui is not new to the brand, and there is no big name.

A large number of consumers expressed dissatisfaction with Tiansenhui's services, parking, etc. It can also be seen from the reviews that there are a large number of shops in the project that have been closed for a long time.

In fact, in today's era when consumption is king, if a shopping mall does not have good consumer content and no good consumption scene, it will not be able to attract the younger generation.

Relevant people familiar with commercial real estate mentioned that "in the post-epidemic era, the commercial real estate industry is experiencing an unprecedented reshuffle, and in the future, highlighting the sense of life experience and focusing on soft power construction is an important weight for commercial real estate to survive in the cracks."

The "untimely birth" of Xinzhou Tiansenhui and the failure of project construction to highlight differentiation and sense of experience may be important factors that are not known to everyone.

Wanda's hosting business

As early as around 2015, affected by the rise of e-commerce and the decline in physical commerce, commercial real estate has been significantly impacted, and shopping malls, office buildings, etc. are facing a painful period in the context of several consecutive years of decline in rents and occupancy rates and unabated supply.

Since 2020, the continuous epidemic has exacerbated the difficulties of commercial operations, coupled with the tightening of real estate financial policies by the state, under the dual pressure, it is increasingly difficult to realize commercial real estate with large initial investment and long return cycle, so the news of commercial real estate closures and sales is frequent.

According to the report released by the Opinion Index, in the past two years, large and medium-sized cities across the country have ushered in a wave of shopping mall closures, including Maoye Department Store, Wangfujing Department Store, Dashang Group, Lotte Department Store and other well-known department stores. At the same time, a number of real estate developers, including Baolong, Shenzhen International, Great Lakes Shares, Shanghai Yongye Commercial and other real estate developers, have successively transferred their commercial real estate projects.

Analysts mentioned that in the past two years, there have been many cases of commercial asset sales, but the actual number of successful finders is not much, and the general location advantage is obvious, and the high-quality assets with a high level of management may be relatively common.

For example, in April last year, Link acquired a 50% stake in the Singapore GIC Fund in Qibao Vanke Plaza in Shanghai, and in June of the same year, Ping An Life spent 33 billion yuan to acquire part of the equity of six Raffles City under CapitaLand.

In contrast, projects such as Xinzhou Tiansenhui, which are located in fourth-tier cities and have unreasonable scale designs, usually have problems such as pricelessness and difficulties in dematerialization.

Looking closely at the Xinzhou Tiansenhui project, it was mentioned in the notification letter that at present, the company has formally signed an escrow agreement with Wanda Commercial Group, and the trustee will formally take over the project in March and is scheduled to officially open in July 2022.

This means that the Xinzhou Tiansenhui project did not adopt the methods of sale or long-term leasing, and adopted the custody model, the actual ownership is still held by Tiansen Group, and the project is hosted by Wanda for operation, and the custody fee is paid regularly.

This custody model is in line with wanda's asset-light strategy in recent years.

It is understood that from 2021 onwards, Wanda Commercial Management will make it clear that it will no longer develop "heavy assets" in the future, that is, it will no longer invest in and hold Wanda Plaza properties, and fully implement the "light asset" strategy.

According to the previously disclosed prospectus, as of June 30, 2021, Zhuhai Wanda Commercial Management managed a total of 380 commercial plazas with a gross floor area of 54.2 million square meters under management. In 2018, 2019 and 2020, the average occupancy rate of commercial plazas under management (excluding parking spaces) was 98.8%.

As of June 30, 2021, the company also had 162 reserve projects, including 133 independent third-party projects.

In addition, some data show that after the saturation of the first and second commercial real estate space, Wanda Commercial Management has closely focused on the shopping needs of the third and fourth lines for leisure and entertainment, and among the commercial squares it manages, there is a large proportion of the third and fourth line projects.

Perhaps, for Xinzhou Tiansenhui, custody is the best way to revitalize it; for Wanda Commercial Management, this move can further expand the layout of asset-light aspects.

However, in this project where the location advantage is not obvious and the surrounding competition is fierce, can Wanda Commercial Management create another myth?