Wanda world
Updated: 2007-08-20 06:50
By the end of 2006, Wanda's properties, including those in use and under construction, totaled about 4.2 million sq m. It has the resources to develop more than 4 million sq m annually, making it one of the largest real estate enterprises in China.
To understand its approach, China Business Weekly reporter Hu Yuanyuan spoke to Lu Ming, vice general manager of Wanda, Beijing Branch.
Q: Wanda is famous for its "menu mode" to develop commercial properties. What is that approach? Can rivals copy it?
A: The major principle is to build projects according to our partners' requirements, thus largely reducing potential risks. We will first sign strategic alliances with our tenants, usually Fortune 500 companies, and then jointly design the project. They will follow us where we build and we will build the property in line with their requirements.
The mode could be copied theoretically but very hard in practice. We only lease retail space rather than sell it, which is almost impossible for smaller property developers because of cash flow pressure.
Q: Beijing will have many more large shopping malls this year. Will the sharp increase in supply influence your business?
A: Not really. The opening of more shopping malls, in fact, will bring more customers to the region and shore up shopping sentiment.
Q: What is your view on the coming trends?
A: More specialized, comprehensive and professional. As developing commercial properties has higher risks, developers must be professional and specialized. Commercial projects will have to be more comprehensive in the future, consisting of shopping malls, hotels, apartments and entertainment amenities.
Q: What's your business target for the next several years?
A: We plans to have 60 Wanda Plazas around the country within two years, with each one's retail floor space ranging from 500,000 to 1 million sq m. If everything goes smoothly, we may see 80 shopping malls over the country by 2010, with the annual rents reaching 10 billion yuan.
Q: As developing commercial properties is capital intensive, do you have plans for a stock market listing? What about the timing and place?
A: Yes, we do. We've mulled over the plan for some time. But we do not yet have a timetable and the listing place is also not decided.
Q: Do you cooperate with foreign real estate funds?
A: Yes, we have had cooperation with one foreign fund. But I cannot disclose its name or other details.
Q: We see that Wanda is also involved in the residential sector. What kind of balance you would like to strike?
A: On the residential side, we mainly eye high-end properties. We have developed Wanda Lake Palace this year, which provides a bird's eye view of the Olympic Garden. It is our first residential project in Beijing.
As well, we will develop commercial complexes that include serviced apartments along with shopping malls, office buildings and hotels.
(China Daily 08/20/2007 page7)