Jindi Zhang Jinyuan: The Key To Do A Good Job In Industry Lies In "Real"

When real estate development enters the "Silver Age", it is the consensus of leading real estate developers to find the second curve. If the layout of a track related to the main business and can produce good benefits, commercial real estate and industrial real estate are good choices.

"Science students" Jindi also reflects its style on the road of transformation. Jindi's vision is not only to be a comprehensive urban service provider, but also to be a developer of new urban areas with integrated development of industry and city. It chooses to make efforts in the field of industrial real estate, hoping that it will become the next growth point of performance.

Although Jindi's choice seems to be the same as that of other real estate companies, the industrial real estate industry is a business with high complexity and considerable threshold. It has heavy investment and long return. If there is a gap, the enterprise may fall into a passive position. Without good operation and service ability, it is difficult to say that it has outstanding advantages in the industrial real estate sector.

It is for this reason that this prudent and pragmatic enterprise in the real estate industry, after entering the industrial real estate field, how to apply its past experience to the new business is a sample worthy of observation.

Therefore, we have a dialogue with Mr. Zhang Jinyuan, assistant president of Jindi group, senior vice president of Jindi Shangzhi group and general manager of jindiweixin. Zhang Jinyuan has been working hard in the field of residential development for many years, but his journey of industrial real estate started from joining Jindi. It is because of this complex experience that Zhang Jinyuan can look at the industrial real estate more comprehensively, and has a deeper understanding of the operational difficulties of industrial real estate.

The way of survival of "narrow door"

"21st century economic report" (hereinafter referred to as "21st century"): many real estate developers layout industrial real estate, have an ultimate goal is to link land through industry. What do you think are the core competencies in the field of industrial real estate? For real estate developers, how to play a subjective initiative in the field of industrial real estate?

Zhang Jinyuan: the core business of Jindi real estate company is the investment, development and self-sustaining operation of the industrial park. In the current residential real estate development mode, the cash flow in the process of development is often balanced by selling houses, but the industrial real estate mode of Jindi relies on "maintenance". Our industrial real estate business mainly focuses on asset investment and self-sustaining operation, which relies on the improvement of asset value to realize the return on investment. Only when the operation is in good condition can we contribute stable cash flow and obtain premium rent. Therefore, product design, industrial investment and operation services are the core capabilities in industrial real estate.

It is precisely because of the characteristics of the industrial real estate that we must develop the industrial real estate with the purest attitude, not to develop the industrial real estate for the sake of "housing land". The significance of industrial real estate is not to take residential land, but to establish real industrial operation capacity and realize the improvement of Industrial Park asset value.

If the industrial real estate is regarded as an independent business, it is a business worth looking forward to for enterprises with low capital cost. From the perspective of rent return rate, it is not worse or even higher than that of commercial, office, hotel and other asset categories. However, the key to achieve a higher rent return rate is the product design in the early stage Industry investment and later operation and service capabilities.

Of course, for traditional real estate developers, the past real estate development experience is not completely useless, in the field of industrial real estate, some of the past successful experience can still play a role.

For example, the experience and ability of real estate development can enable real estate developers to build industrial parks faster, better and with lower cost, and the product design ability of real estate developers can also be partially transferred to the field of industrial real estate. Industrial customers in different industries and different development stages have different requirements for the space, structure, function and supporting facilities of the industrial park. If we can make use of years of real estate product design concept and experience, we can not only achieve product standardization and rapid replication, but also achieve product innovation to meet the continuous upgrading needs of different customers, so as to achieve product leadership.

In addition, in the industrial real estate, it is inevitable to configure supporting facilities to meet the living needs of industrial parks, such as long-term rental apartments and other products with residential functions. In this regard, the ability of real estate development can also play a role.

On Jindi's industrial model

21st century: in the field of industrial real estate, Jindi is one of the few real estate enterprises with full chain layout. Can you introduce how the whole chain of "investment, incubation, research, management and withdrawal" of Jindi works?

Zhang Jinyuan: specifically, Jindi has been committed to building a collaborative development model from industrial investment, incubation, acceleration to park operation, hoping to create a complete industrial ecological chain and provide enterprises with full life cycle services.

In the industry, Gemdale focuses on artificial intelligence and life science, because they have broad development prospects, and a large number of listed companies and unicorn enterprises have emerged. We have also made a lot of industrial investment in the fields of artificial intelligence and life science.

In addition, Gemdale has also invested in a number of world-famous venture capital funds, focusing on industrial frontier projects for strategic investment, involving artificial intelligence, big data, cloud computing, chip R & D, biotechnology, gene detection and other fields.

Just as Gemdale's philosophy, "the core competence and ultimate goal is to incubate an industry". In the field we focus on, we have also deployed a number of industry incubators in Beijing, Shenzhen, Shanghai, Nanjing, Silicon Valley and other global industrial highlands. At the same time, we have introduced top talents with professional background to accelerate the incubation of innovation projects.

Industrial real estate is a business model with a long return period, but Jindi insists on long-term thinking. Most of our assets are self-sustaining. We can improve the asset value of the park by introducing high-quality customers, improving operation quality and promoting industrial agglomeration.

In the last part of the whole closed-loop, Gemdale also forms a matching capital exit path for different types of Park assets, realizes the exit through different forms of asset securitization, and forms a closed-loop of business model value.

"21st century": if the purpose of industrial real estate is to realize the return on investment by opening up the closed loop, it will inevitably put forward higher requirements for the ability of enterprises. What do you think is the difference between golden area and other enterprises? How to assess industrial real estate companies?

Zhang Jinyuan: there may be some differences in Jindi's view of industrial real estate and other companies. In Jindi, residential development and industrial real estate are completely independent businesses, and they are two parallel business units. Our industrial real estate company is only engaged in the development and operation of industrial parks.

Therefore, Jindi's assessment of industrial real estate companies is also from the perspective of this business model. For example, if the investment in industrial parks should meet certain financial returns, we will have corresponding standards, such as rental income, investment promotion speed, rent return rate (NOI) after full rent, etc. to measure the operation of each park.

We should bear in mind that we are "not doing the industry with real estate thinking, but with the logic of industry". From this point of view, industrial real estate companies must have rich industrial resources to form "network effect". If you want to do a good job in the industry, it must have a scale, and it must have R & D and production-oriented industrial parks in China's major industrial core cities, so as to better serve enterprises and help them grow.

Because when an enterprise grows to a certain scale, it will have the demand to expand its production, and it will build R & D centers and factories in China's industrial core cities. If we have layout and carriers in these cities, we will be able to provide them with corresponding services. Therefore, the scale is also an important indicator for Jindi to assess industrial real estate companies.

As of May 2021, the industrial park layout of Gemdale group has begun to take shape: it has realized the layout in more than 20 industrial core cities in the world, developed and operated 33 industrial projects with an operating area of more than 4 million square meters, covering the Yangtze River Delta, Pearl River Delta, Bohai Rim, New York, Boston, San Francisco, Los Angeles, San Jose Santiago and other global industrial Highlands, the industrial park has attracted many of the world's top 500 enterprises and leading enterprises in the target industry.