Vanke Explores 'Integrated Urban Services' to Promote Post-Expansion Growth
Luo Tao
DATE:  Jan 04 2018
/ SOURCE:  Yicai
Vanke Explores 'Integrated Urban Services' to Promote Post-Expansion Growth Vanke Explores 'Integrated Urban Services' to Promote Post-Expansion Growth

(Yicai Global) Jan. 4 -- Property developer China Vanke Co. [SHE:00002] has forayed into the 'integrated urban services' market in the face of flattening sales growth in the post-expansion era. The group has branched out with a new business model it unveiled last year in hopes of boosting performance.

"In 2017, Vanke carried out experiments in the Shanghai market focusing on two businesses dubbed 'grow together with customers' and 'set trends together with customers,'" Vanke Senior Vice President Zhang Hai told Yicai Global. "The message is that the company will stay together with customers, without any party being the leader or the follower."

The Shenzhen-based firm unveiled its 'Rainforest' initiative last May, with the aim of bringing customers services for their whole lives.

Vanke hopes to 'be together with customers' by providing young consumers with long-lease apartments and offering them high-quality properties when they are better-off and eldercare and healthcare services after they retire, Zhang said.

Vanke has entered the eldercare market through organic development and acquisitions. It has about 5,800 beds at nursing homes in Shanghai, of which 1,452 are in use. It operates institutions under the co-investment, self-operation, leasehold, service outsourcing and public-private partnership models.

Vanke Shanghai has four kinds of eldercare premises -- apartments for the aged, nursing homes, elderly service centers and rehabilitation facilities. It has opened nine in all.

Eldercare is an important part of 'integrated urban services,' Zhang said.

Under the Port Apartment brand it introduced in 2016, Vanke has seven long-lease complexes in operation with nearly 2,000 apartments along the Shanghai suburban highway.

The company participated in teaching management activities at 13 schools as it explored new education services.  

"Apart from traditional businesses, Vanke Shanghai also offers product construction and marketing services, financial asset management and urban 'renovation' services, and they represent the direction of Vanke's future development in the region," Zhang said.

The Rainforest scheme covers the group's core focus of property development as well as new businesses such as commercial property, industry, offices, product construction and marketing services, financial asset management, and urban renovation services. Vanke's goal is to make the 'forest' more prosperous through the interactive and synergistic development of various segments.

Vanke is driving a business shift from a developer to an operator, and this is an inevitable stage of transformation for many real estate companies, said Yan Yuejin, chief research officer at E-House China R&D Institute. A firm needs to have a strategic plan, sufficient funds and human resources, and a large pipeline of projects to be able to carry out such a reorganization, Yan said.

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Keywords:   Vanke,Shanghai,Business Model Transformation,Service Developer