China Resources Real Estate City Exploration: The Birth of a Beer Town

A boom in the development of industrial city complexes is setting off in the real estate circle.

Recently, at the CHINA RESOURCES Snowflake Beer Headquarters Base located in Xin'an Street, Bao'an District, Shenzhen, the launching ceremony of the newly started projects in the third quarter of 2021 in Bao'an District was officially held.

The China Resources Snow Beer ABP project is impressively listed. With a total construction area of about 870,000 square meters and a total investment of more than 10 billion yuan, the project is planned to be built in three phases and fully completed in June 2025.

According to the announcement of "China Resources Land South China Region", the HEADQUARTERS base of China Resources Snowflake Beer was originally transformed from the urban renewal project of "Jinwei Beer Shenzhen Second Factory". It is planned to be planned as a "snowflake beer town" industry-city complex project including headquarters building, industrial research and development buildings, factory dormitories and commercial facilities.

In fact, the above projects are not only the product of the combination of China Resources Land's real estate and property experience and the background of China Resources Snowflake Beer industry, but also a landing practice of the industry-city integration model.

Perhaps, in the new stage of seeking stock growth, the industry-city complex is one of the important directions that real estate enterprises need to think about.

"Beer Town, History says

Recently, on the day of the launching ceremony of the newly started project in the third quarter of 2021 in Shenzhen Baoan, Song Zhanmin, secretary of the Guangdong Regional Party Committee and general manager of China Resources Snow Beer, attended the scene and told the outside world about the history and planning path of the Snowflake Beer Headquarters Base in an exclusive interview.

Song Zhanmin said that the Snowflake Beer Headquarters Base project was originally a Snowflake Beer Industrial Park. After the completion of the base, the headquarters of Snowflake Beer will move to Bao'an District and the 100,000 kiloliters of craft brewing project will bring more than 10 billion yuan of industrial output value to Bao'an.

Viewpoint Real Estate New Media learned that the "Snowflake Beer Industrial Park" referred to by Song Zhanmin was formerly known as the location of Jinwei Beer Bao'an Second Factory.

In 1989, the former Guangdong Enterprise (Group) Co., Ltd. controlled Shenzhen Beer Co., Ltd. and built Shenzhen Brewery (Jinwei No.1 Factory) in Buxin Village, Luohu District. In 1990, the first bottle of Jinwei beer belonging to Shenzhen people was officially shipped. In 1997, Jinwei No.2 Factory, located in Bao'an District 72, Shenzhen, was put into operation. At that time, the company had formed a production capacity with an overall scale of 400,000 tons per year.

For more than two decades, the name of "Jinwei Beer" was called the Pearl River Delta Market, and at its peak it occupied more than 80% of the Shenzhen market. At that time, the advertising slogan of "come to Shenzhen, drink Jinwei" became a special memory in every deep drifting and hard work experience, and also became an emotional continuation of the "beer town" that has now landed.

In 2013, China Resources Snowflake and Jinwei Beer became acquainted. In February of that year, SABMiller, the world's second-largest beer producer, announced that China Resources Snowflake's parent company, China Resources Venture Capital and Jinwei Beer, a joint venture in China, announced that China Resources Snowflake had acquired Jinwei's beer business for about 5.384 billion yuan.

In addition to the Jinwei Beer Factory in Luohu, Shenzhen, which is owned by Guangdong Hai Land, the other Jinwei Beer Breweries in Chengdu, Dongguan, Foshan, Shantou, Tianjin, Xi'an and Shenzhen Bao'an are all taken over by China Resources Snowflake.

It is worth mentioning that Shenzhen Luohu Jinwei No. 1 Factory also began to be renovated in 2016, and has now been transformed into a "Guangdong City" urban complex relying on the Shuibei Jewelry Area Industrial Ecological Park. Jinwei also changed its name to Guangdong Land later and fully engaged in the real estate industry.

Shenzhen Jinwei Brewery No.2 became a Snowflake Beer Industrial Park, and its operation continued until it closed in November 2019.

In December 2019, Shenzhen Bao'an District signed a cooperation framework agreement with China Resources Snowflake Beer at the 2019 Shenzhen Global Investment Conference, and China Resources Snow Beer intends to invest about 10 billion yuan to build the CHINA RESOURCES Snow Beer Headquarters Base Project in Bao'an.

At that time, according to the "Baoan Release" news, Shenzhen Baoan and China Resources Snow Beer will carry out comprehensive strategic cooperation. At that time, China Resources Snow Beer planned to relocate its headquarters from Beijing to Shenzhen to build the headquarters of listed companies, the headquarters of Snowflake Beer, and the joint operation center of Heineken and Snowflake in China.

In July 2020, the Bao'an District Urban Renewal and Land Consolidation Bureau released the "Urban Renewal Unit Planning for the Snowflake Beer Area of Xin'an Street, Bao'an District (Draft)". In March this year, the plan was approved, and the main body of the project declaration was Snowflake Beer (Shenzhen) Co., Ltd.

According to the plan, the land area to be demolished by the project is 190,700 square meters, and the area of development and construction land is 133,000 square meters. Among them, the planned volume is 873,000 square meters, including 330,000 square meters of factory buildings, 211,000 square meters of research and development buildings, 27,000 square meters of commercial, office and hotel buildings, including 48,000 square meters of other facilities.

In February 2021, according to the general plan of the project released by the official micro of "China Resources Land Shenzhen", the headquarters base of China Resources Snowflake Beer includes 4 33-48F industrial research and development buildings, 4 21F factory buildings, 4 44-50F dormitories, beer theme experience area, snowflake innovation square and commercial, cultural and sports facilities.

"The project will create various possibilities for the research and development of cooperative enterprises, and at the same time provide space for the economic development and investment promotion work of Bao'an District." Song Zhanmin expressed his expectations for the future development of the industry at the project commencement ceremony in August this year.

China Resources Industrial City Business Economy

Driven by the current multiple pressures and stock trends, the focus of the development of the real estate industry has shifted from land development and "strong buying and selling" scenarios to urban transformation, community services and other "strong operation" scenarios. Coupled with the acceleration of China's urbanization and the upgrading of the original industry, many housing enterprises have joined the boom in the integrated development of industry and city, including characteristic towns.

Taking China Resources Group as an example, under the condition of combining its own business sector, industrial base and urban characteristic resources, the development and landing of the aforementioned Shenzhen Bao'an "Snowflake Beer Town" industry-city complex project was carried out.

In fact, in an industrial complex project, it includes various business areas such as park planning and industrial design, land and real estate development, infrastructure construction, commercial life support, industrial investment attraction, industrial incubation guidance, and comprehensive management of the park.

Zhongtai Securities Research Report pointed out that as the main role of the park developer to undertake the development of the industrial park, the business scope covers the complete development process of the characteristic town from the early land development, to the medium-term real estate development, and then to the later operation of the park and the transformation and renewal of the existing property.

Specifically, there are five stages, including the first-level development or generation development period of land, the development period of industrial projects, the cultivation period of industrial projects, the integration period of industrial chains, and the second-level development period of land.

For example, on the "Snowflake Town Project", China Resources Land Co., Ltd. announced on January 22, 2021 that China Resources Land and China Resources Beer established a joint venture company (Shenzhen Runxue Industrial Co., Ltd.) with a capital of 500 million yuan each through Shenzhen Runtou and China Resources Snowflake Investment as a project trading company, combining the former's real estate and property experience with the latter's beer industry knowledge and experience to jointly develop the "Snowflake Beer Plot" project.

According to the announcement of China Resources Beer Co., Ltd. on the same day, the above-mentioned project company paid a monetary compensation of 4.65 billion yuan to China Resources Snowflake for the initial relocation, and then it will make additional compensation according to the target sales, and the maximum compensation is 9 billion yuan. According to the estimated use of the land plot and future properties, the proposed sales volume including tax is 15.775 billion yuan.

At the same time, the announcement disclosed that China Resources Land Shenzhen signed a construction service contract with China Resources Snowflake, and the former was appointed as the project announcement manager including the construction of headquarters, research and development center, staff dormitories and beer museum for China Resources Snowflake. Among them, CR Snowflake will pay 3% of the total construction cost of the project, and the total construction service fee will be 60 million yuan to 100 million yuan.

However, according to people familiar with the project to the new media of the viewpoint real estate, the project is mainly operated by China Resources Land and is still in the project establishment stage. In this way, the "Snowflake Beer Town" is still in the initial stage of the development of the industry-city complex project.

The above-mentioned person then said that in the future, with the gradual advancement of the project, various business sectors including asset-light and industrial investment will be introduced within the China Resources Group for promotion.

In addition, Viewpoint Real Estate New Media learned from a number of project insiders that Runcheng New Industry, as a newly promoted member of China Resources Land, also participated in assisting the project in industrial planning and positioning, and will also be responsible for the project's investment promotion related work.

It is understood that the "Snowflake Beer" project has requirements for the future investment access threshold, including industry qualitative and taxation, the former including beer development, intelligent measurement and control, industrial robots, etc. of the current consumer goods manufacturing industry and upstream and downstream intelligent manufacturing equipment in the industrial chain, etc., and the latter requires enterprise taxes of about 375 yuan per square meter.

Industry analysts believe that compared with the traditional real estate development business, the development park business has the characteristics of strong resources, slow turnover and high profits, and at the same time has three advantages: ownership cost, investment attraction, and potential growth of holding properties.

From the perspective of continuous operation, while carrying out primary development business, the enterprises in the park usually obtain corresponding land resources within the scope of development, and carry out secondary development of real estate in the integrated development mode of sales + holding, while meeting the growth of scale and the sustainability of profitability.

In the later stage of operation of the park, relying on its own management of the industrial characteristics of the park, enterprises can carry out diversified development attempts, break through the boundaries of operation, broaden the scope of business in property management, multi-industry property operation, industrial investment and incubation, etc., and to a certain extent, provide opportunities for other property and industrial companies to expand the scale of new tracks.

According to the valuation report on December 31, 2020, the market value of the "Snowflake Beer Land" that has been upgraded to ordinary industrial and new industrial land is about RMB2.349 billion. According to the analysis of Zhongtai Securities, although the properties held by enterprises in the park are relatively low in short-term report returns, with the gradual maturity of regional investment promotion, the asset value in the industrial park continues to increase with the value of the region.

After combing the operation logic of the industry-city integration project, it is found that compared with the previous traditional parks, the focus of the future park is not only the construction and delivery of physical space, but also the core link lies in the integration of industrial resources and the operation of the city.

Only to complete the development and construction of characteristic town projects of the above scale, enterprises are not only required to have a comprehensive business foundation such as real estate, commerce and finance, but also have a certain ability to integrate resources and have sufficient cash flow reserves to support long-term turnover.

In the list of the world's top 500 companies in 2021 released by Fortune magazine on August 2, China Resources Group, which includes multiple business sectors such as large consumption, urban construction and operation, technology and finance, ranked 69th with an annual turnover of US$99.4376 billion. Among them, China Resources Land made the list for the first time, ranking 470th with an annual turnover of US$26.0271 billion.

This article originated from the viewpoint real estate network