Core Viewpoint - Hang Lung Group is making a significant investment in the luxury market of Hangzhou by signing a major leasing contract for the Hangzhou Department Store, indicating a strategic move to strengthen its presence in the high-end retail sector [2][5][11]. Group 1: Leasing Agreement Details - The leasing contract involves the property located at 546 Yan'an Road, Hangzhou, with a total area of approximately 42,000 square meters, set to be leased to Hang Lung Business Operation (HK) Limited for 20 years starting from April 1, 2028 [5][6]. - The rental fee is set at RMB 37.5 million per quarter, with a 4.5% increase every three years, amounting to a total rental payment of over RMB 3 billion over the 20-year period [5][8]. - The rental agreement includes a rent waiver for the first two years, allowing for three months of rent to be waived each year [5][6]. Group 2: Market Context and Competition - The luxury retail market in Hangzhou is competitive, with established players such as Hangzhou Tower, Hangzhou MixC, and Lakeside Yintai in77, all of which have reported significant sales figures [14][16][18]. - Hangzhou Tower achieved sales of RMB 14 billion in 2023, while Hangzhou MixC reported sales of RMB 11.2 billion in the same year, indicating a robust luxury market [16][18]. - The upcoming Hang Lung Plaza, located near the leased property, is expected to create a combined luxury retail space of over 300,000 square meters, further intensifying competition in the area [11][29]. Group 3: Strategic Implications for Hang Lung - Hang Lung's decision to invest heavily in Hangzhou reflects its confidence in the city's economic potential, driven by a strong consumer base and a favorable business environment [31][35]. - The company has a history of successful operations in mainland China, with a significant portion of its revenue derived from retail leasing, which underscores its strategic focus on high-end commercial properties [30][35]. - The expansion in Hangzhou is part of a broader strategy to enhance its market position in key cities, leveraging its existing assets and brand reputation to capture a larger share of the luxury retail market [35].

Group 1 - The "Hi Hangzhou East Station Dimension Festival" has been launched, featuring immersive scenes and diverse interactive experiences to engage consumers during the summer [1] - The event is a key practice in empowering the "business-office integration" new ecosystem at Xidi Port, connecting over 20 global leading dimension brands and offering various activities [1] - The event will run until August 6, providing surprises for local residents and tourists [1] Group 2 - Xidi Port East Yun Outlets is the first self-operated commercial practice of Hangzhou Urban Investment Group, with a total construction area of 54,853 square meters, serving a residential population within a 3-kilometer radius [1] - The project aims to create a "24-hour" vibrant space by linking dimension culture, trendy economy, and digital technology, targeting business people, young consumers, and local residents [1] - The Xidi Port Smart Industry Park is also a key project of the group, designed as a provincial micro-enterprise park with a total area of over 42,000 square meters [2] - The industry park offers customized office spaces and co-working incubation spaces to meet the needs of businesses at different development stages [2] - Hangzhou Urban Investment Group aims to establish Xidi Port as a model for "station-city integration" development, leveraging new consumer exploration and technological empowerment [2]

Core Insights - The commercial market in Beijing is experiencing a revival in offline consumer demand, with a significant transformation in consumption structure as it enters the second half of 2025 [1] - A total of 21 new commercial projects are expected to open in Beijing in the second half of 2025, with a total commercial area of approximately 1.6 million square meters [1][2] - The new projects include a mix of existing commercial renovations and new key projects, featuring various formats such as urban complexes, outlet malls, and department stores [5] Project Overview - In the first half of 2025, 10 new projects were launched, adding 751,700 square meters of commercial space [1] - Notable upcoming projects include: - Beijing Dinghao THE HUB (B Building) with 20,000 square meters, opening in July 2025 [2] - Beijing Shangde Yintai City with 56,000 square meters, opening on September 30, 2025 [2][8] - Beijing Xiaozhan Park STATION PARK with 33,000 square meters, opening in September 2025 [2][10] - Beijing Zhongguancun ART PARK (East District) with 200,000 square meters, opening in December 2025 [2][11] - Beijing Bayli with 500,000 square meters, expected to open by the end of 2025 [2][13] Market Dynamics - The majority of the upcoming projects are developed and operated by leading companies such as Yintai, Sunac, Wangfujing, and others [3] - Haidian and Tongzhou districts lead with four upcoming projects each, while Daxing, Chaoyang, and Changping follow closely with three projects each [3] - The distribution of project sizes indicates a trend towards smaller commercial spaces, with over 60% of the new projects being under 30,000 square meters [5] Notable Features of Key Projects - Beijing Shangde Yintai City aims to create a "garden-style social shopping space" focusing on art, culture, and nightlife, with over 120 emerging lifestyle brands [8] - Beijing Xiaozhan Park STATION PARK emphasizes community and lifestyle, featuring nearly 100 brands and innovative design elements [10] - Beijing Zhongguancun ART PARK will enhance the commercial vitality of the area with a mix of well-known brands and unique experiences [11][12] - Beijing Bayli is a major investment project expected to attract over 500 brands, focusing on young consumers and urban middle-class [13] Conclusion - The commercial landscape in Beijing is set for significant growth and transformation in the latter half of 2025, with a diverse range of new projects that cater to evolving consumer preferences and enhance the overall shopping experience [1][5]

Group 1 - The core assets of Huaxia Kaide Commercial REIT are the Changsha Yuhua Pavilion project and the Guangzhou Yunshang project, both of which have shown steady growth in revenue and increasing occupancy rates. Approximately 70% of the leases expiring in 2025 have been renewed or replaced, indicating potential for future rent growth [3][9] - The expected fundraising amount for the fund is 2.297 billion yuan, with a projected fair value range for the project assets over the next 12 months estimated between 2.347 billion and 2.923 billion yuan, yielding an IRR of 6.90% to 7.87% [3][4] - The fund anticipates distribution rates of 4.84% and 4.85% for the years 2025 and 2026, significantly higher than the latest distribution rates of comparable consumer REITs [3][4] Group 2 - The Changsha project focuses on entertainment and retail, while the Guangzhou project is primarily driven by dining. The Changsha project has seen an increase in daily foot traffic from 26,500 to 31,600 people, with revenue growing from 495 million yuan to 624 million yuan from 2022 to 2024 [17][20] - The Guangzhou project has also experienced growth, with daily foot traffic reaching 44,400 and sales of 743 million yuan in 2024, reflecting a compound annual growth rate of 24.82% and 9.83% respectively from 2022 to 2024 [21][25] - The original equity holder, CapitaLand Commercial, has a rich reserve of projects and a deep accumulation of asset securitization, with a total of 35 consumer infrastructure assets exceeding 3 million square meters [3][38] Group 3 - The overall revenue for the projects from 2022 to 2024 was 230 million, 245 million, and 252 million yuan respectively, with the Guangzhou Yunshang project contributing over 60% of the total revenue [49][51] - The EBITDA for the projects was 126 million, 135 million, and 74 million yuan, with a significant drop in the Guangzhou project’s EBITDA in 2024 due to asset impairment losses [49][51] - The projects have a stable revenue structure, with fixed rent accounting for over 60% of total income, while management fees contribute between 20% and 30% [53][55] Group 4 - The occupancy rate has gradually increased to over 96%, with the Changsha project maintaining an occupancy rate above 95% for the past three years. The Guangzhou project has also seen an upward trend in occupancy rates, reaching 95.5% in 2024 [3][3] - The rental yield ratio for the Changsha project was 14.5%, 14.4%, and 13.5% from 2022 to 2024, while the Guangzhou project showed a higher rental yield ratio of 24.2%, 18.9%, and 19.3% during the same period [3][3] - The projected fair value range for the project assets is between 2.347 billion and 2.923 billion yuan, with a predicted capitalization rate of 4.55% to 5.50% for 2025, which is lower than comparable REITs [4][4]

Core Viewpoint - The focus of urban renewal in Shanghai has shifted from residential and commercial updates to the "building economy," emphasizing the renovation of office buildings to meet modern demands and improve occupancy rates [4][27]. Group 1: Urban Renewal Focus - The emphasis on urban renewal has transitioned to smaller-scale projects, particularly in the office sector [4]. - The government has initiated a program to update office buildings, selecting 10 pilot units for renovation [9][11]. - Six pilot business units have been publicly announced, covering an area of 20.56 square kilometers, larger than the total area of Huangpu District, with over 200 office buildings involved [15][12]. Group 2: Pilot Units and Renovation Plans - The six announced business units include Hongqiao Economic and Technological Development Zone, Dabaishu, Wujiaochang, Zhenru, Caohejing, and Suhewan, located within the inner ring of Shanghai [11][12]. - Each unit has a different focus for renovation, such as enhancing community integration, promoting industry-residential synergy, and improving living amenities [20][22]. - The renovation strategies include quality upgrades, modifications, reconstructions, and transformations, tailored to the specific needs of each area [20]. Group 3: Current Challenges in Office Market - The office market in Shanghai is transitioning from a growth phase to a focus on existing stock, with a significant emphasis on the renovation and repurposing of older office buildings [27][28]. - High vacancy rates are a pressing issue, with some areas exceeding 30%, indicating a need for timely renovations and adjustments [50][51]. - The overall office space market is saturated, with a reported 17 million square meters of Grade A office space as of last year, leading to increased rental pressure [44][46]. Group 4: Renovation Examples and Strategies - Successful renovation examples include the Jin Sui Building, which underwent a comprehensive update using digital design methods [31]. - The Hongqiao Economic and Technological Development Zone has seen a strategic shift in its tenant mix, maintaining an occupancy rate of over 85% through innovative events and adjustments [34]. - Various office buildings have been repurposed for different uses, such as converting traditional office spaces into mixed-use developments, including retail and residential components [36]. Group 5: Future Outlook and Goals - The Shanghai government aims to optimize the office building landscape by promoting 40 to 50 renovation projects from 2023 to 2027, enhancing the quality and distribution of office spaces [63][66]. - The goal is to create a more integrated urban environment where work, life, and leisure coexist harmoniously, thereby improving the overall urban experience [22][71]. - The ongoing transformation reflects Shanghai's commitment to adapting to changing industry needs and demographic shifts, ensuring its competitiveness in attracting talent and businesses [67][70].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - From July 7 to July 11, 2025, the secondary - market prices of China's listed public REITs showed an overall correction, with a weighted REITs index return rate of - 1.26%. Compared with other mainstream asset classes, REITs performed weakly [1][11]. - The trading volume and enthusiasm in the REITs market decreased. The total net inflow of main funds was 7.483 million yuan, and the total amount of block trades reached 628.09 million yuan, an increase from the previous week [2][3][32]. - There were no new REITs products listed in the primary market this week, and the status of the first - issue project of "Huaxia Zhonghe Clean Energy Closed - end Infrastructure Securities Investment Fund" was updated to "Feedback Received" [4][44]. 3. Summary According to the Directory 3.1 Secondary Market 3.1.1 Price Trends - **At the major asset level**: The secondary - market prices of China's listed public REITs corrected. The returns of China's public REITs were - 1.26%, ranking at the bottom among mainstream asset classes [11]. - **At the underlying asset level**: Both equity - type and franchise - type REITs showed a downward trend, with franchise - type REITs having a smaller decline. Among different underlying asset types, energy - type REITs had the smallest decline this week [16][18]. - **At the single - REIT level**: 8 REITs rose and 60 REITs fell. The top three in terms of increase were Harvest JD Warehouse Infrastructure REIT, CICC China Greentown Commercial REIT, and Southern SF Logistics REIT [22]. 3.1.2 Transaction Volume and Turnover Rate - **At the underlying asset level**: The total trading volume of public REITs this week was 2.75 billion yuan, and the ecological and environmental protection - type REITs led in the average daily turnover rate during the period. The top three in terms of trading volume were transportation infrastructure, park infrastructure, and consumption infrastructure; the top three in terms of average daily turnover rate were ecological and environmental protection, affordable rental housing, and consumption infrastructure [26]. - **At the single - REIT level**: The performance of single - REIT trading volume and turnover rate continued to be differentiated. The top three in terms of trading volume were Huaxia Hefei High - tech REIT, Huaxia Beijing Affordable Housing REIT, and Harvest JD Warehouse Infrastructure REIT; the top three in terms of trading amount were Huaxia Beijing Affordable Housing REIT, Huaxia China Resources Commercial REIT, and CICC Anhui Expressway REIT [29]. 3.1.3 Main Net Inflow and Block Trade Situation - **Main net inflow situation**: The total net inflow of main funds this week was 7.483 million yuan, indicating a decline in market trading enthusiasm. The top three underlying asset types in terms of net inflow were consumption infrastructure, energy infrastructure, and affordable rental housing. The top three REITs in terms of net inflow were CICC China Greentown Commercial REIT, Huaxia China Resources Commercial REIT, and CITIC Construction Investment State Power Investment New Energy REIT [32]. - **Block trade situation**: The total amount of block trades this week reached 628.09 million yuan, an increase from the previous week. The highest single - day block - trade turnover was on Thursday, July 10, 2025. The top three REITs in terms of block - trade turnover were Huaxia China Resources Commercial REIT, Huaxia Beijing Affordable Housing REIT, and Huaxia Shenzhen International REIT [33]. 3.2 Primary Market 3.2.1 Listed Projects - As of July 11, 2025, the number of China's public REITs products reached 68, with a total issuance scale of 177.061 billion yuan. Transportation infrastructure had the largest issuance scale, followed by park infrastructure [38]. - No new REITs products were listed this week [39]. 3.2.2 Projects to be Listed - There were 28 REITs in a to - be - listed state, including 16 first - issue REITs and 12 to - be - expanded REITs. The status of the first - issue project of "Huaxia Zhonghe Clean Energy Closed - end Infrastructure Securities Investment Fund" was updated to "Feedback Received" [44].

Core Viewpoint - In major cities like Beijing and Shanghai, individuals and institutions with idle funds are increasingly seeking investment opportunities in the second-hand housing market, focusing on tenant stability, rental yield, and the surrounding living environment rather than just city or regional factors [2][5][9] Investment Trends - Investors like Li Kun are purchasing commercial properties, such as a ground-floor shop in Haidian District, Beijing, for 5 million yuan, with a unit price of approximately 70,000 yuan per square meter, while the residential average in the area is around 90,000 yuan per square meter [2][4] - The annual rental yield for Li Kun's property is estimated at around 4%, reflecting a stable demand for local services provided by such commercial properties [5][11] Market Dynamics - The competition among buyers is intense, leading to price fluctuations; for instance, a property in Zhongguancun was sold for 6.11 million yuan, a 110% premium over its assessed value [5][9] - In June, a commercial property in Shanghai sold for 25 million yuan, with a unit price below 10,000 yuan per square meter, indicating a strong potential for rental yield [7][9] Investment Opportunities - The current market presents unique investment opportunities characterized by a divergence in property prices and rental yields, with some properties showing significant rental yield increases as prices drop [9][11] - Investors are particularly interested in distressed assets, including properties from bankruptcy proceedings, which often see price reductions with each failed auction [10][11] Investment Criteria - Both individual and institutional investors are establishing systematic investment standards, focusing on core urban areas and evaluating the economic conditions of the surrounding regions [13][14] - The rental yield is a critical factor in investment decisions, with a focus on properties that can provide stable income despite market fluctuations [13][14]

Core Insights - The article discusses the trend of individual and institutional investors, like Li Kun, seeking investment opportunities in the second-hand real estate market, particularly in commercial properties, due to stable rental yields and low vacancy rates [1][2][4] Investment Trends - Investors are increasingly focusing on the stability of tenants, rental yields, and the surrounding living environment rather than just the city or region for investment decisions [1][2] - In major cities like Beijing and Shanghai, some investors are engaging in competitive bidding for quality commercial properties, leading to significant price premiums [2][4] Market Dynamics - The article highlights a shift in investment logic due to real estate market adjustments, with many institutions selling quality assets at prices significantly lower than their purchase prices from 2019 [4][5] - The current market is characterized as a buyer's market overall, but high-quality projects remain competitive, creating a seller's market for those assets [5] Rental Yield Analysis - The rental yield for the commercial properties discussed ranges from approximately 2.5% to over 8%, depending on the specific property and market conditions [2][3][4] - Investors are particularly interested in properties with rental yields exceeding 3%, indicating potential bottom-fishing opportunities [5] Investment Criteria - Investors, both individuals and institutions, are establishing systematic investment standards, focusing on core urban areas and the economic conditions of those regions [6][7] - The article emphasizes the importance of assessing rental yields and potential appreciation when evaluating investment properties, with a noted preference for commercial over residential investments due to stability concerns [6][7]

Core Insights - The Shanghai office market in the first half of 2025 is characterized by insufficient new demand and rising vacancy rates, with an overall vacancy rate reaching 22.4%, up 0.3 percentage points from the end of last year [1][5] - The market remains cautious, with continued downward pressure on rents driving cost-sensitive relocations, as tenants seek more favorable lease terms [1][2] Market Overview - In Q2 2025, the Shanghai office market recorded a net absorption of approximately 57,300 square meters, with non-CBD areas showing a net absorption of about 74,200 square meters, primarily driven by state-owned enterprises and third-party office operators [2][5] - The overall vacancy rate in the market increased by 1.2 percentage points to 24.6%, with the CBD vacancy rate rising to 16.9% [2][3] Rental Trends - Rental rates for Grade A office buildings continued to decline, with CBD rents decreasing by 2.4% to 6.9 RMB/sqm/day and non-CBD rents down by 2.7% to 4.5 RMB/sqm/day [3][6] - Landlords are maintaining flexible negotiation terms to stabilize occupancy rates and attract new tenants, often agreeing to lease restructuring under extended lease conditions [3][6] Investment Activity - In Q2 2025, the Shanghai commercial real estate market recorded 23 asset transactions totaling 8.2 billion RMB, with office assets accounting for 38% of the total transaction value [6][7] - The average transaction value for individual projects decreased to 360 million RMB, with 61% of transactions occurring in the 100 million to 300 million RMB range, indicating increased liquidity in smaller assets [6][7] Sector Demand - The financial sector led the market with a 22% share, driven by funds and non-bank financial institutions, followed by consumer goods manufacturing at 17% and TMT at 16% [5][7] - Despite challenges, the market showed signs of activity, with a 126.1% increase in net absorption compared to the previous period, indicating a potential recovery in the high-end manufacturing, TMT, and financial sectors [5][7] Future Outlook - An estimated 770,000 square meters of new supply is expected in the next six months, which may increase market competition but also enhance liquidity and rental transaction activity [5][7] - The focus on core assets and emerging sectors is expected to continue, with investors showing interest in properties with stable cash flows and growth potential [7]

Core Insights - The article discusses the opening of "Louis", a new landmark inspired by a luxury brand, in the Nanjing West Road shopping district, and its impact on consumer behavior and local businesses [2][5][10]. Group 1: Consumer Scene Creation - "Louis" is not just a flagship store but a composite space that integrates exhibition, dining, and retail, creating a new consumer scene [5][9]. - The concept of "consumer scene" has been recognized in national planning documents, emphasizing the importance of modern and fashionable consumption environments to enhance urban living quality [3][4]. Group 2: Impact on Local Businesses - Following the opening of "Louis", foot traffic in the surrounding area surged, with peak visitor numbers reaching 170,000 on June 28, leading to a 20% to 30% increase in sales for nearby businesses [10][12]. - However, the initial surge in foot traffic was short-lived, with many businesses reporting a decline in customer numbers after the first week [12][13]. Group 3: Long-term Viability of Consumer Scenes - To sustain consumer interest, initiatives like the "Jing'an Shopping Tour" have been launched to connect "Louis" with surrounding commercial resources, aiming to convert transient visitors into repeat customers [13]. - Experts suggest that for "Louis" to remain relevant, it must establish emotional connections with the public beyond its luxury branding, similar to how the Eiffel Tower evolved into a beloved landmark [13][18].