Beijing Capital Land Ltd. (BCL or “Company”) is a leading integrated real estate developer in China listed in Hong Kong Stock Exchange (Stock Code: HK2868) on June 19, 2003.
Beijing Capital Group Co., Ltd. (BCG), BCL’s controlling shareholder and actual controller, is a large state-owned enterprise group directly under the supervision of the State-Owned Assets Supervision and Administration Commission of the Beijing Municipality. GIC Private Limited, BCL’s strategic partner, is one of the world’s top sovereign wealth fund wholly owned by the Government of Singapore.
Aspiring to be the most valuable integrated real estate developer in China, BCL focuses on residential development, outlets complex, urban core complex and primary land development four core business lines, complemented by three innovative business lines including cultural and creative industries, high-tech industry property and rental housing. With its strong backup of state-owned assets, BCL has gained an edge in the market through efforts made in promoting industrial coordination, international cooperation, innovation-driven capital operation and delicacy management. BCL has expanded its business in more than 30 medium- and large-sized cities across the country and has well planned its presence in Australia, France and other overseas markets. BCL also owns a Hong Kong listed company, Beijing Capital Juda Ltd. (Stock Code: HK1329), which focuses on the development of outlet complexes and other commercial property projects.
1.Business Line
1.1 Four Core Business Lines
Residential Property Development
Investments are focused on the three core metropolitan areas of Beijing-Tianjin-Hebei, the Yangtze River Delta and the Guangdong-Hong Kong-Macao Greater Bay Area and key tier-2 cities with market potential. Led by mid-to-high end residential projects, the Group continues to carry out its “BCL Made 2020” product strategy, advance its product research and development capabilities, and promote product standardization for first-time home buyers and those looking for upgrades. The Group also enhanced its product quality and improved its customer service in order to enhance the overall brand.
Representative product lines of BCL’s residential development include the following series: “Tian Yue”, “Xi Rui”, “A-Z Town”, “Capital First City” and “Capital City”.
Integrated Outlets
Leveraging Capital Grand, the commercial property development arm of Beijing Capital Land, the Group implemented a combined asset-heavy and asset-light business model to rapidly and strategically expand its outlet projects in target cities through construction, M&A and joint ventures. The objective is to build the largest outlet operating platform in Mainland China and to distinguish the Group from its competitors with its growth potential. Meanwhile, the Group provided a wide array of brands with direct access to consumers through these outlets by strategically connecting consumers to those commercial brands, and ultimately helped all parties achieve great success.
Representative projects of BCL’s outlets include the Beijing Fangshan Capital Outlets, Hainan Wanning Capital Outlets, Zhejiang Hangzhou Capital Outlets and Hubei Wuhan Capital Outlets.
Urban Core Integrated Complex
High-end urban commercial complexes that are developed above metro stations in the central areas of key cities such as Beijing, Shanghai and Shenzhen remain a key business focus. By introducing top-tier business partners and integrating resources such as land, capital, brands and operations, the Group endeavors to develop landmark projects that will bring value-added returns and securitized assets. The Group will continue to drive growth of its urban core complex business line and establish an asset expansion platform on top of it.
Representative projects of BCL’s urban complexes include the Beijing Lize Financial Business District Project and Beijing International Center Project.
Primary Land Development (Including Shantytown Redevelopment)
The primary land development business (including shantytown redevelopment) mainly focuses on BCL’s residential development area, which allows the Company to benefit from land value growth and enables the Company to acquire prime land resources at lower costs. In addition, large scale development allows the Group to explore and develop industry-city integration models in order to increase product differentiation.
Representative projects of BCL’s primary land development projects (including shantytown redevelopment) include the Beijing Hujialou shantytown redevelopment project, the Beishicao shantytown redevelopment project and the Tianjin Wuqing primary land development project.
1.2 Three Innovative Business Lines
Cultural and Creative Industries
The Group’s mission in this business segment is to build and develop high quality projects that cater to the creative and high-tech markets and to provide services to the urban healthcare industry. With projects focused on “big culture”, “big information technology” and “big health”, the Group’s cultural and creative industries business comprises three strategic segments, namely industrial park operation, industrial investment and content creation. With a strong presence in Beijing, the Group has created an industrial park management and investment platform to integrate resources and build an ecosystem for cultural and creative industries.
Representative projects of BCL’s cultural and creative industries include the Langyuan Vintage Project, the Yongyuan Project and the Media Elite Headquarters Project in Beijing.
High-tech Industrial Property
BCL has positioned itself as an innovative and integrated service provider, and a platform for the rapidly growing wave of high-tech industries. With an “industrial + property” model, it is working to build a business ecosystem that is able to integrate innovation, industrial development and value creation. The Group’s industrial park development covers industrial development, space management, environmental programs, human resources, operations, investment and fund raising, with the aim of building four ecosystems and nine service platforms.
A representative project of BCL’s high-tech industrial property business is the Zhongguancun IC Park in Beijing.
Rental Housing
In response to the government’s declaration that “housing is for people to live in, not for speculation” and “new developments should have units to both buy and rent”, BCL has been actively pushing forward its expansion into the rental housing market. While the Group is transforming and upgrading some of its existing projects into rental housing units, it is also seeking to acquire collectively-owned land on which to develop rental housing projects. Under the brand “Hé Cohesive Hub” and based on an “apartment + common area + services” model, it provides premium “3+2+X” rental space to younger urban residents in collaboration with the coworking business UCOMMUNE, and BCL’s outlets business.
Representative projects of BCL’s rental housing projects include the Fangshan He Yuan and Chaoyang Shibalidian He Yuan projects in Beijing, and the Shuanggang He Yuan project in Tianjin.
1.3 Financing Platform: Prime Golden Capital
Prime Golden Capital is positioned as the financing platform under BCL. As a critical part of the Group’s “RMB100 Billion Value Ecosystem” strategy, Prime Golden Capital has strong shareholder support and possesses professional operation capabilities. It integrates finance and property, and looks for both investment and fund raising, and aims to boost the rapid development of BCL’s main business as well as to speed up BCL’s strategic transformation across finance, property and urban development. Prime Golden Capital concentrates on “property + finance” and primarily provides funding in five major areas for BCL, namely real estate development, asset management, cultural and creative industries, private equity and overseas real estate.
2.Development and Outlook
Looking out to 2019, the government’s directive that “housing is for people to live in, not for speculation” and “new developments should have units to both buy and rent” will lead the industry to steady growth and innovative transformation. Industrial policies will continue to focus on executing city-specific measures, establishing long-term goals and maintaining balanced monetary policy targets. Different regions will continue to see diverging performance while the industry as a whole will further consolidate, which will present new opportunities as well as challenges. The Group will continue to strive to achieve “quality growth”, and will adopt the following development strategies:
1. The Group will adhere to a “fast turnover” strategy, and improve its operating capabilities on all fronts by executing the “369 construction time limit standards”. Leveraging the Group’s in-house salesforce, BCL aims to achieve an annual sales target of RMB80 billion and speed up its cash collection. With momentum from the fast turnover, the Group will be able to increase its investments, primarily in its three key metropolitan areas. The Group will expand its regional investments and acquire strategic resources by taking advantage of its RMB100 billion value primary land development platform in the Beijing-Tianjin-Hebei Area, as well as by creating synergies across different industries and seeking cooperation and M&A opportunities.
2. The Group will implement its “BCL Made 2020” product strategy by focusing on project design, project quality, cost control and customer service. To refine project design and better gauge customer demand, it will set up a big-data-powered customer analysis platform. In addition, the “Tian Yue” and “Xi Rui” brands will set a benchmark for exquisite craftsmanship and be used to drive standardization in more regions. By executing the “3300” cost budge initiative, the Group aims to further control costs on its strategic procurement platform. It will also improve the service quality of the Shouwan Property Management Service Company to upgrade the customer experience and deliver high quality projects.
3. As a part of the Group’s ongoing transformation strategy, it will proactively develop three major innovative businesses, namely the cultural and creative industries, high-tech industrial property and rental housing. This is a direct response to the government’s call for “new developments to have units to both buy and rent”. The Group will take advantage of the synergies with Beijing Capital Group and leverage its state owned enterprise resources to roll out new and diversified businesses, such as “property + culture” and “property + technology”. Specific areas include intangible cultural heritage, high-tech, media and “big health”. The group will use a combined asset-heavy and assetlight business model to accelerate the development of new projects and create a new business platform. In terms of rental housing, the Group will capture opportunities from collectively-owned land leasing, and continue to strengthen the “Hé Cohesive Hub” product series, a rental housing brand developed by the Group.
4. The Group aims to deploy outlet projects in “Twenty Cities in Five Years”, and strategically seek M&A opportunities in the outlet industry to help speed up the process. Meanwhile, leveraging its integrated online-to-offline sales platform, the Group will accelerate its digital transformation to cater to customer needs and improve operating performance, which should help set a new benchmark in the new retail industry.
5. The Group will build and maintain diversified financing channels, explore various equity financing opportunities, and seek M&A opportunities in the capital markets. It will continue to obtain multiple high-quality financing resources, maintain reasonable scale, and strictly control costs. While direct financing from the capital markets remains a key approach, the Group will explore REITs, supply chain finance and other innovative financing channels. The Group will also accelerate the development of Prime Golden Capital to grow along the “property + finance” value chain, and implement the “RMB100 Billion Value Ecosystem” strategy, leveraging its combined advantages in industries and financing.
Committed to the corporate culture of ‘Passionate, Reliable, Sharing, Happiness and Collaborative Innovation’, BCL takes as its mission to create a new mode of urban life. Aiming at excellence, openness and transparency, BCL has been dedicated to providing clients with a quality lifestyle and offering investors with stable growth in earnings, thus contributing to the overall societal harmony.
