China New City Commercial Development expanding into three non-property businesses
Homestay tourism, medical and health services and agriculture seen as offering scope for growth
Shi Kancheng, a tax official turned entrepreneur, spun off China New City Commercial Development via a separate listing on the Hong Kong stock exchange’s main board in July of last year, raising net proceeds of HK$550.8 million.
That was almost seven years after Shi, now in his 50s, listed Zhong An Real Estate, which he founded in 1997, in Hong Kong.
The projects of his firms are mostly in the mainland’s better developed Yangtze River Delta.
The spin-off is just one of a number of similar moves by mainland developers as they venture into new businesses as part of their restructuring efforts to survive a slowdown in China’s once sizzling real estate market.
Q: The spin-off means China New City Commercial Development will mainly be involved in non-residential property development, right? What exactly is that, office, retail or some other new business?
A: In our strategic arrangement, China New City will invest in “one old, three new” businesses. The one old refers to existing commercial property development and management, including office and retail. China’s urbanisation is progressing fast and new town centres need clusters of commercial buildings. We target those with a population of over 100,000 and in economically developed regions. We will also expand to China’s vast numbers of communities, of several tens of thousands of households, in urban areas, where there are few facilities such as shopping malls. There is still big room to grow.
