We will continue to develop quality residential property while expanding into the hotel, commercial and office property sub-sectors with a geographic focus on the greater Yangtze River Delta region. By gradually increasing the proportion of these investment properties in our portfolio, we aim to create a greater breadth of sources of stable future cash flow. We believe such diversification will reduce our overall exposure to the cyclicality of the residential property sales market and project completion schedules, while enhancing the overall value of our portfolio.
The Group has a sizeable land bank in Hangzhou City, neighbouring Anhui Province and other quality regions, and seeks to distinguish itself from competitors by focusing on large-scale property development. For example, Vancouver City and the International Office Centre each have an aggregate planned GFA of over 1.7 million sq.m, while Green Harbour has an aggregate planned GFA of more than 800,000 sq.m. The large project scale also facilitates the Group’s efforts to test and incorporate innovative design features, and allows us to offer a wider range of products within the same development in a cost-efficient way, including high- and low-rise apartments, low-density residences and villas, and amenities such as hotels, clubhouses, gardens, kindergartens and schools.
The development of commercial property facilitates a reduced exposure to the cyclicality of the residential property sales market. Highlong Plaza, a large-scale commercial complex project under the Group, has performed well since opening at the end of 2007, with the shopping mall’s rental rate reaching 99%. The project – which is regarded as a landmark building in Hangzhou’s Xiaoshan District – pioneered the ‘whole life centre’ consumption concept in Hangzhou, and covers shopping, entertainment, leisure, catering and other forms of business. Currently, the Company envisions building Yuyao Times Square as a large-scale complex with an area of 450,000 sq. m., and plans to hold retail properties for long-term investment through acquisition, merger or alliance. It may also consider forming strategic partnerships with other developers, contractors, consultants and investors on certain development plans for commercial projects.
The Group has focused on developing quality hotels in key cities of the Yangtze River Delta region. Zhong An Real Estate has entered into a management contract with Holiday Inns (China) with respect to the Holiday Inn Xiaoshan Hangzhou. A Highlong Plaza development project, Holiday Inn Xiaoshan Hangzhou is a 25-storey hotel built to five-star standards with 417 guestrooms optimised for business and leisure travellers. The Group has also proposed luxury hotel developments for Youyao Times Square and its International Office Centre (IOC) project in Hangzhou, and the construction of Qiandao Lake Hotel and Vancouver City Resort Hotel.
The Company plans to increase investment and focus on quality office space development to meet expected growing demand in Hangzhou. These projects include the International Office Centre (IOC) located at the new central business district on the south bank of the Qiantang River, and Yuyao Times Square. The Company intends to hold high-rise, high quality office space for long-term investment. The Company also intends to enter into tenancy agreements with international and local tenants to secure recurring rental income. The Highlong Plaza office building project has been in excellent operation since opening, and has achieved an ideal rental rate.