New | Mainland developer Sunshine 100 goes big on small projects
Developer to focus on street shops in lower-tier Chinese cities amid shift towards services
Small-cap developer Sunshine 100 China Holdings plans to focus on street shop projects in smaller mainland Chinese cities as the services sector is expected to play a bigger role in the economy, its chairman says.
Yi Xiaodi told the South China Morning Post traditional department stores and shopping centres would find it hard to survive as anchor tenants closed their outlets in the face of competition from Taobao and other e-commerce shops.
However, the demand for places to eat, meet, relax and entertain children would see the opening of street shops close to where people lived, Yi said.
The "extension" of their kitchen, dining room, study and even living room areas to nearby street shops would then make it possible to cut the size of their expensive apartments, he said.
"China is suffering a housing glut, but there is still big demand for serviced apartments for young people," he said.
The sell-out of 3,600 small flats in a Chengdu project gave Yi confidence in replicating his strategy for other developments. In Chongqing and Changsha, he cut the residential space and increased the commercial area in his projects to lift the communities' living environment.
Such a strategy fits Sunshine 100 well as it cannot afford the risk of paying billions of yuan for a piece of land in top-tier cities such as Beijing, where it is based.