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China Vanke project improves 'urban village'

By Chai Hua in Shenzhen, Guangdong | China Daily | Updated: 2017-12-13 07:34
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An apartment building is reflected on glass at a sales center of a Vanke residential property project in Jinan city, East China's Shandong province, Feb 10, 2016. [Photo/IC]

China Vanke Co, a leading residential property developer, expects to present model rooms this month of its first leasing project transformed from urban village buildings in Shenzhen.

"Urban village" refers to a zone of residential apartments built by individuals and usually of poor condition in terms of sanitation, management and fire protection. Such buildings have occupied about 70 percent of the southern city's leasing market.

Vanke has established a subsidiary company in charge of collectively renting these buildings, making some modifications, bringing in commercial sectors and then leasing them out.

Its first project in Yutian village, in the city's downtown Futian district, kicked off on Sept 29. If it is successful, the developer will replicate the model to more urban village projects.

The debut of the new project also represents Vanke's transformation from property developer to city supporting service provider, including property management, education and catering.

"Though Vanke has accumulated experience of understanding people's residential demand, entering the urban village market is not easy," said Yan Yuejin, research director at E-house China R&D Institute.

It has become necessary for property developers to explore new business as the government launched a series of policies to curb speculation and home prices have faltered in major cities.

In the first 11 months of 2017, Vanke's sales have amounted to 467.65 billion yuan ($70.67 billion), less than its competitor China Evergrande Group and Country Garden Holdings Co Ltd.

But the company does not expect people to regard it as a property developer anymore. Its chairman Yu Liang told media representatives at a meeting last Friday in Xiamen, Fujian province, that "our time as a developer has gone".

"Vanke's team in Xiamen has completed the transformation and we will promote the change in other cities gradually," he said.

Vanke built its first rental apartment project in Xiamen and up to now it has developed 10 rental projects, as well as educational facility Meisha campus, along with restaurants, community commercial, outdoor traveling and even intelligent parking businesses.

Moreover, these new explorations have become the core of Vanke Xiamen's development, rather than supplemental projects, according to the company.

Its property management business is also growing. Zhu Baoquan, Vanke's senior vice-president, said they receive on average two projects on the level of 200,000 square meters every day.

In addition, property under their management has surged to more than 2,280 projects, and 52 percent of them are not for Vanke's own property.

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