Boao | DongDu International: Seize the opportunity to further expand the global footprint
Abstract: Standing at the turning point of the times, real estate enterprises transform into urban services operators in succession, while DongDu International (DDI) approaches the middle-class life service field again with a unique vision.
If taking general commercial and residential real estate development as the mainstream, then DongDu International has been developing in another way over the past twenty years.
DongDu International, a real estate enterprise, has a bond with the housing for young generation. After creating the housing product for the first young generation “Dongdu Youth Square” in 1989, it has developed and updated young generation housing series of products including Y·City Series, iHouse Series, Elysees Series, , and Blue & White Mansion in Shanghai, Nanjing, Suzhou, Wuxi, Changzhou, Chengdu and Hong Kong.
Standing at the turning point of the times, real estate enterprises transform into urban services operators in succession, while DongDu International approaches the middle-class life service field again with a unique vision, proposing to become the world’s leading middle-class service supplier, promoting the transformation of middle-class lifestyles and aiming at the Blue Ocean of middle-class services.
DongDu International is also gradually making its new Blue Ocean strategy come from planning into practice: in 2013, DongDu International built its first family-based top private club in Shanghai, with the purpose of providing top, rich, private family activities for the middle-class families; in 2015, the club was settled down inside Shanghai Town & Country Center (STCC), becoming the first site of DongDu International club around the world.
According to DongDu International, this project is one of the Company’s main projects this year and it will be officially initiated for sales on April 19 this year, with the hotel apartments as its main feature. Building 1 of 5 STCC in the southern part of the whole project is the place where the club is located.
It is worth noting that DongDu International is mainly engaged in real estate development, international investment and development, club development, Macro-Finace and other diversified business development. And STCC is an important carrier for DongDu International to build its M & A financial agglomeration area, except for DongDu International Club.
Statistics show that in 2015, DongDu International Group and a state-funded company inside Changfeng Ecological Business District jointly established Shanghai International Mergers and Acquisitions Center (Construction), to carry out international mergers, acquisitions, restructurings and other business. As an important carrier for the M & A of financial agglomeration areas, STCC is featured by the Shanghai Communication Center for Financiers, which provides a world-class place of services and activities for the Shanghai financial M & A personnel and families.
DongDu International indicated that, Shanghai International Mergers & Acquisitions Center (Construction) is a consultation platform providing investors with mergers, acquisitions and restructuring service information at the early establishment stage, and the Company is carrying out the preparation work based on the objective, including team recruiting and marketing system developing. In future, the company tends to turn the information platform into a trading platform.
As for the financial M & A business, DongDu International has also made a breakthrough. On July 7, DongDu International and Vortex signed a strategic cooperation agreement. According to the agreement, both parties would establish a long-term strategic cooperative relation, to provide business cooperation in respect of Shanghai International Mergers and Acquisitions Center’s information offering, Tokyo TCC Club and Japan non-performing assets acquisition project.
Although DongDu International set up a subsidiary in California in 2004 and invested and purchased several properties and property management companies in US and Canada successively, it invested in real estate projects in Asia for the first time. DongDu International expressed that signing the agreement with Vortex signifies its planning to further expand the global footprint and open up new opportunities in real estate and financial sectors after entering USA and Canada.
DongDu International pointed out that in the context of the current RMB exchange rate adjustment and economic restructuring, overseas real estate investment risks and opportunities inevitably co-existed, the key was to seize good opportunities, which requires a more extensive exposure to project-related information, while “finding good projects, using local teams, fully approaching local markets” were the three aspects which should be emphasized when investing overseas real estate.
Here is the full transcript of the interview with DongDu International by Guandian Real Estate New Meadia:
Guandian Real Estate New Media: DongDu International aims to achieve the agreements signed with a total of RMB 3 billion in the real estate sector this year. Which aspects will you start from to ensure the achievement of the objective? What are the major projects and sources of goods this year? How to arrange the rhythm of promoting the sales?
We will achieve the performance objective from shipment, team, fund and strategy four aspects.
This year our major projects include Changfeng STCC, Shanghai Qingpu DongDu Yuelai Town and Suzhou Dongdu Lakeside Green Town Garden. Shanghai Changfeng Project starts its sale on April 19 this year, Suzhou Project is the No. 1 in the sales of commercial residential buildings in Xiangcheng District of Suzhou, and Shanghai Qingpu DongDu Yuelai Town plans to initiate the sales in Q4 this year.
Guandian Real Estate New Media: At the beginning of 2016, you mentioned that three projects would be obtained this year, how is the progress? Which cities do you look for new project resources?
DongDu International: We are identifying suitable projects in Shanghai, Suzhou, Wuxi, Changzhou, Nantong, Nanjing and other cities. We have the initial plan to be gradually implemented in the second half year.
Guandian Real Estate New Media: The land market in the first and second-tier cities continues to hit, and a lot of real estate enterprises also tap into the transformation of old buildings. This was your key business direction. Do you consider looking for opportunities towards the stock market?
DongDu International: Yes, we are experienced in the transformation of old buildings, and we continue to identify opportunities to play to our strengths and utilize social resources.
Guandian Real Estate New Media: Under the destocking situation, the prices of land and houses in some cities continue to rise, resulting in a phenomenon of “increasingly luxury apartments in first-tire cities” and “sharp rise in land prices in second-tier cities”. What are your opinions on this industry environment? After the boom, what do you think is the state of the market in these cities ?
Supply and demand determine the price, which is the universal law of the market economy.
In first-tier cities such as Beijing and Shanghai, and second-tier cities such as Suzhou, Hangzhou and Nanjing, residential land resources are relatively scarce, economic foundation is solid, population import is relatively smooth, and the demand of commercial residential buildings exceeds supply for a long term, therefore the real estate market of these cities, especially commercial residential buildings, is worth looking bullish for a long term, there may be partial and staged adjustments, but in general there will be a steady rise.
Guandian Real Estate New Media: How is the progress of your overseas property right trading center project? In terms of international investment, what’s your plan?
Shanghai International Mergers & Acquisitions Center (Construction) is a consultation platform aiming to provide investors with mergers, acquisitions and restructuring service information at the early establishment stage, and we are carrying out the preparation work based on the objective, including team recruiting and marketing system developing. In future, we tend to turn the information platform into a trading platform.
In terms of overseas investment, we conduct the investment and development relating to real estate in the local markets of North America. At the same time, we carry out the international M & A work, mainly focusing on insurance and securities industries. In 2016, we sign a strategy agreement with Vortex; after entering USA and Canada, we plan to further expand the global footprint and open up new opportunities in real estate and financial sectors.
Guandian Real Estate New Media: Overseas investment boom continues, and the domestic capital is utilized in a series of overseas acquisitions. In the context of the RMB exchange rate adjustment and economic restructuring, how could housing enterprises seize opportunities and avoid risks in overseas investment? How to understand the correlation between foreign investment and immigration boom?
First of all, overseas real estate investment risks and opportunities inevitably co-existed. In order to seize good opportunities, it requires a more extensive exposure to project-related information, while “finding good projects, using local teams, fully approaching local markets” are the three aspects which should be emphasized when investing overseas real estate.
Now, there are more and more Chinese settlers in United States, Canada, Australia and Britain, which bring favorable conditions for overseas investment. In the areas where Chinese people are living, we may have more advantages than the local investors since we know more about the living habits of these target customers.
With the fluctuations in the foreign exchange rate, more and more people take into account the configuration of overseas assets or overseas migration, which bring a positive signal to Chinese investors, encouraging real estate enterprises to go out and serve these investors. Foreign investment and immigration boom can be said to complement each other.