By DCL
In the first quarter of 2020, the unexpected COVID-19 has swept the world, and the macro economy is facing huge challenges. Under the double pressure of the uncertain economic situation and the large amount of new supply in emerging commercial districts, the office rental market of Beijing is experiencing certain pressure in the short term, and the vacancy rate has reached a new high.
Against this background, DCL’s distressed real asset restructuring strategy achieved an exciting new milestone. The Zhongguancun Weibo Times Building opened in March as scheduled. With its perfect location, convenient transportation and unique product design，DCL get an excellent answer sheet upon opening. At present, the asset has received inquiries from many real estate investors. In March, significant process has been made as DCL has successfully renovated and managed the property.
Name: North Building, Block C, Weibo Times Center
Floor: B1-F5, a total of six floors
Area: 6700㎡
Address: No. 17, Zhongguancun South Street, Haidian District, Beijing
Transportation: About 400 meters away from Subway Line 4 Weigongcun Station
Rent: 12.4 yuan / square meter / day
Project highlights: Mid-sized Single building in core area of Beijing
-
Value Discovery
Zhongguancun, as China’s first national high-tech zone, the first national independent innovation demonstration zone and the first national talent zone, is a banner of China’s technological innovation. With its excellent entrepreneurial ecological environment, Zhongguancun has become a gathering place for unicorn enterprises representing the development of innovative economy.
The Weibo Times Center is located on Zhongguancun South Street, surrounded by the National Library, Renmin University of China, Minzu University of China, Beijing Institute of Technology, and the Academy of Agricultural Sciences. The creative atmosphere and location advantage have created a fantastic environment for Weibo Times Center.
The North Building of Block C of the Weibo Times Center was originally a collateral of NPL from a financial institution. DCL team leveraged its comprehensive advantages in the field of distressed asset and overcome many obstacles and successfully obtained the asset at a discount price in mid-2019.
During the long-term follow-up of the project, the DCL team conducted full market research on the surrounding area, and we have increasingly strengthened our confidence in successfully managing this project. Due to the fragmented property rights of the Weibo Times Center Block C and the tenant complex, the rent level has been lowering for a long while compared with the surrounding area, only half of the rent of the Beijing International Center across the road. On the other hand, the occupancy rate of the office buildings along Zhongguancun South Street where the project is located is basically above 95%, and the demand is very strong. If high-quality products can be created, there is huge room for rent increase. Fortunately, the subject property has independent entrances, exits and traffic lines. The building height is even higher than Grade A office buildings, and it is fully equipped to be converted into high-quality office properties.
-
Value Restoration
After acquiring the asset, DCL team completed all tax clearance and transfer procedures within one month and started the construction design process. After about half a year, the renovation was completed in December 2019. After the renovation and upgrading of the facade, the adjustment of the internal space and structure, the introduction of intelligent office systems and smart building systems, the Weibo Times Center project has truly completed its rebirth.
Before Facade Modification VS After Facade Modification
The original building facade of this project has a monotonous line, shallow entrances and exits, and lacks depth and sense of space. And because of the absence of maintenance, it seems to be out of usable condition.
The transformed facade is combined with stylish black metal steel plate and stone, plus the layout of steps, ramps, greenery, curb stones, etc., so that the overall sense of technology, three-dimensional sense and line beauty of the building can be vividly displayed.
Before Hallway Renovation vs. After Hallway Renovation
Before Renovation of Elevator Hall VS After Renovation of Elevator Hall
The biggest highlight of the interior space transformation is the planning of the sinking stairs, opening up the ground floor and underground space, solving the lighting problem of the ground floor, and perfectly activating the functionality of the underground. The B1 floor covers the meeting area, conference room, coffee area and lounge area, and can provide supporting services for the entire building.
The office areas on the 2nd-5th floors can meet the open office needs of about 100 people through flexible area combinations, as well as the private office needs of small teams of 5-20 people each floor. The use of simulated landscaping allows each office to enjoy sufficient lighting and improve the efficiency of the property.
Mainly due to the location advantage and precise product design, the Weibo Times Center project successfully attracted a super unicorn internet company to move in as the sole tenant for the whole building, and achieved twice the rental premium of the main building of Weibo Times Center Block C.
-
Conclusion
Since its establishment, DCL Investments has established powerful cooperative relations with various financial institutions such as trust compaines, banks, AMCs, etc. DCL has accumulated rich experience in the industry, and maintained regular communication with a large number of institutions, so that DCL can capture opportunities accurately and obtain high-quality assets. On the other hand, DCL Investments also actively cooperated with excellent third-party institutions, and introduced well-known co-working space brands to provide operational management services in the Weibo Times Center, thereby further improving the efficiency of asset operations. Through the practice of the Weibo Times Center project, DCL Investments has further consolidated the capabilities of real estate restructuring strategies.
Against the backdrop of economic transition, investment opportunities for distressed assets, especially distressed real estate, will continue to emerge, and the transformation of existing properties is also a trending strategy attracting more and more attention. DCL Investments will continue to maintain a professional attitude of intensive cultivation, construct a high-quality investment portfolio, and search for more star cases like Weibo Times Center.