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China SCE Group: Ready to Set off for a New Race
2020.09.16
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This article is retrieved from Times News

Recently, SCE Commercial Management, a subsidiary of China SCE Group, was ranked sixth in the top 10 of China Commercial Property Brand Value List 2020 by China Index Academy, based on its comprehensive strength and reputation.

SCE Commercial Management has ben well-prepared, and since the implementation of its first commercial project, its strengthen has continued to grow. It is planning to build 100FUNWORLDby 2025, comprehensively pushing forward the strategy of scaling up the distribution of FUNWORLD. As at late August 2020, SCE Commercial Management has enetered 21 cities across China with a total of 31 projects, including 22 China SCE World Cities. The Group's judgement on future development is reflected behind the continuous development of the commercial sector. The traditional residential business in the past that continued to develop is version 1.0, and the expanded development model can support a larger profit margin. However, in the era of constant volume where the total volume of transactions is gradually peaking in the real estate market, this model is bound to change. The transformation from single property development to diversified integrated investment is inevitable in times. "As a property developer, we have to consider whether we will be able to stand and survive in a decade or more. China's commercial real estate market is still full of opportunities and is far from saturated, some cities don't even have real shopping centres at the moment, there lies our opportunities and challenges."

FUNWORLD and FUNLIVE

Moving Forward Together

In 2017, based on the progress of urbanisation in China, the future development pattern of the real estate industry and the domestic demand market of consumer upgrade, China SCE Group confirmed its development strategy of “ primary business supplemented by synergic business activities”. Residential development confirms the "hundreds-of-billions level strategy" and continues to expand the "primary business" development model; the "FUN + happy life" ecosystem confirms the transformation and synergistic development strategy with the new retail shopping mall of FUNWORLD and together with FUNLIVE rental apartments as the “synergic business activities”, entering a new race with comprehensive synergic growth. As the core business segment of the rapid development of SCE Commercial Management, FUNWORLD has now become an important "synergic business activity", bearing the major responsibility of helping the Group to complete its transformation smoothly. Through ten years of business model exploration, FUNWORLD has developed three distinctive product lines, Urban Chic, Quality Life and Urban Outlets, in order to cover the needs of different markets and population, leading the consumption trend and renewing the business pattern. In terms of operation, the "FUNWORLD department store operation" model provides quality sales channels and services for different brand merchants, while associating the rent of the shopping centre with the operating conditions of the merchants, and driven by digitalisation, we work together with the merchants. As another "synergic business activity", based on the national housing strategy of "both renting and selling" and the development prospect of long-term FUNLIVE, FUNLIVE Apartments focused on the development and operation of FUNLIVE in first- and core second-tier cities and formed a unique business model of "fund management + apartment chain operation". In 2020, 23,000 FUNLIVE apartments have been opened and put into opeartion, and we expect to have opened and be operating more than 200,000 FUNLIVE apartments by 2025. The growth curve of the second business is not just a duplication, but is "tailor-made" according to the market and our own strengthens, in line with the trend of the times. With the continuous development of the "synergic business activities", it will bring more room for development and sustainable business momentum to China SCE Group.

Diversifying the Development of Land Bank

Reaching for hundreds-of-billions level strategy

Since the development target of real estate of RMB100 billion, the number of cities which China SCE Group enters has increased to more than 50 today, which is a remarkable result of nationalisation. Among the new land bank in the first half of 2020, 8 lands were acquired by the strategy of "primary business supplemented by synergic business activities", including 6 W FUNWORLDand 2 FUNLIVE; and at the same time, nationalisation and regional cultivation will be implemented together, entering another city while safeguarding an existing one. According to the top 50 real estate companies in terms of land bank in the first half of the year compiled by the Leju Financial Research Institute, China SCE Group ranked 27th with 33.03 million sq.m.

As at late August, the total contracted sales of China SCE Group amounted to RMB57.015 billion, representing a year-on-year growth of 18%, which is also 61% of the annual target of RMB93 billion, of which the contracted sales of RMB9.214 billion was achieved in August alone, which was a record year-on-year growth of 56%. The growth rate of the sales exceeded market expectations amidst the slowdown in the overall growth rate of real estate enterprises.

Since 2020, there have been 15 international and domestic brokerage firms that unanimously gave China SCE Group a "buy" rating, and 7 international brokerage firms confirmed it as their top pick. An analyst said, "China SCE's performance has bucked the trend and achieved high growth, despite the impact of pandemic, the scale of the sales showed a rising trend, it is expected to succeed its 100 billion goal."