How to revitalize existing assets

Nowadays, urban development often defines political achievements from the perspective of new construction and expansion, but after years of urban construction, cities have accumulated a large number of stock assets in the process of development, such as office buildings being rented, widely distributed public transportation systems, garbage disposal facilities, and garbage recovery systems. According to the rough calculation of newly-increased productive investment and total assets stock in units owned by the whole people in recent years, the ratio of increment to stock is about 1: 8. How to make stock assets play a better role in the process of urban development has attracted more and more attention from all over the world. Local governments have proposed to integrate urban resources and revitalize existing assets, such as injecting a large number of existing assets into urban investment and realizing asset appreciation through resource integration. However, the specific effect has not been well realized.

Da Yue Consulting Co., Ltd., when providing consulting on revitalizing the operation of existing office buildings for a certain group in Beijing and providing bus resources integration operation service for a certain community, analyzed the reasons why it is difficult to revitalize the existing assets and how to realize the revitalization operation through resource integration, and shared it with you here. The range of stock assets is relatively wide, including land, traditional state-owned bus companies, garbage treatment plants, sewage treatment plants, water supply plants and so on. We understand that the integration of such assets can not achieve good results and achieve its due purpose, mainly for the following reasons:

First, the old assets, image and function can not meet the actual needs. Just like the office building, which is the research object of our project to revitalize existing assets, although it has superior location and convenient transportation, the building is relatively old and the grade is not high, and the property service level can't keep up with the office needs of mainstream demand groups. Therefore, under the environment of continuous appreciation of Beijing real estate, this kind of office building cannot realize its intrinsic value due to its objective conditions.

Second, resources are scattered or duplicated, and economies of scale cannot be formed. Public transportation in all parts of our country has gone through the stage of affiliated operation, with repeated operation of lines, scattered vehicles and huge profits, relatively scattered personnel and industry management, frequent competition for passengers, chaotic industry order, unsatisfied travel needs of the people, and public transportation enterprises are also facing losses, so the government has to rectify and reorganize the industry.

Third, the operation mode is traditional, with low added value and lack of competitiveness. With the development of economic globalization, the management level and technical level are improving, and the traditional business model has gradually lost its advantages. In the past, many assets lacked in-depth understanding of the market during the construction process, which made the asset construction standards and operation forms unable to keep up with the latest market demand.

In view of the above characteristics of stock assets, it is necessary to explore different integration modes for different types of assets, carry out innovative design again, realize the overall optimal effect of 1+ 1 >: 2, enhance the overall value of resources, and realize the purpose of revitalizing business.

Take the office building as an example, build a brand personalized business model and revitalize the middle and low-grade office buildings in the city. There are a large number of office buildings with similar characteristics in Beijing market, with good location advantages, convenient transportation, small scale, dilapidated buildings and low added value of tenants. In order to realize the real market value, this kind of office building must be based on improving its own consciousness and unifying the standardized service level. For similar office buildings, we should consider the overall design of scattered office buildings, explore the personalized business model of office buildings, give full play to their traffic location advantages, improve the environment and services, and then gain market recognition and realize market value.

Take the bus company as an example, through reorganization and merger, integrate resources and activate urban power. Buses in suburban counties of Beijing are mostly scattered, and their service is not guaranteed. The enterprise itself is also at a loss. After the introduction of preferential fare policies, the pressure on financial subsidies continued to increase. In recent years, all districts and counties have reformed or reorganized with other bus companies, optimized line resources, realized the integrated operation of urban and rural public transport, and enjoyed resources such as gas stations and repair shops. After the integration of various resources is completed, the bus company will realize economies of scale, turn losses into profits, ease the financial pressure and ensure the people get comfortable and convenient travel services.

Take the water supply plant as an example, flexibly use financing methods according to the characteristics of assets to ensure the drinking water demand of one party. With the acceleration of urbanization, urban water use is increasingly urgent, and large and small water supply plants are constantly being built. Under the pressure of funds, BOT and other market-oriented operation modes make full use of the characteristics of municipal public facilities, integrate social funds and give play to the role of government funds. In addition, in view of the existing government-invested waterworks, the operating losses have brought endless financial burden. We can initially explore the integration of scattered waterworks, and form new financing channels through specific financial products, such as asset securitization, to ease the financial pressure.

It can be seen that through resource integration, the scale, branding and high added value of existing assets can be realized, and its essence is to change the traditional resource operation mode, realize the goal of revitalizing and increase the overall value of assets. By using Scientific Outlook on Development and seeking a new model, the existing assets will "glow with new vitality" and make greater contributions to urban development.

Liang Hongyu/Wen