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Speaker 1: Joining us in our studios here in Hong Kong is

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Speaker 1: Claire Cormier Tilkei, who is head of Greater China at Hines,

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Speaker 1: and we are here to discuss Singles Day. Today's the

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Speaker 1: tenth of November. Tomorrow is the eleventh, and so it's

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Speaker 1: a perfect time. Thanks very much for being with us.

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Speaker 1: And by the way, if you're listening, Hines is a

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Speaker 1: private company out of the US that has quite significant

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Speaker 1: exposure in China in the property market and in other

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Speaker 1: related businesses such as logistics and the running of malls

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Speaker 1: and such. So a very interesting time to have this discussion. Claire,

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Speaker 1: it's been a tough time in China, Laate COVID zero.

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Speaker 1: You've got a debt crisis that's tied to the property

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Speaker 1: market and I think what we might call regulatory overreach

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Speaker 1: by the party in UH in some cases. So it's

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Speaker 1: tough doing business in China now, no or yes, well, Brian,

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Speaker 1: doing business in real estate is never easy, regardless of

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Speaker 1: of the broader environment. Um uh, it'd say right now.

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Speaker 1: For us, we've we've been in China since the early

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Speaker 1: nineties and have been through other other pandemics and other cycles.

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Speaker 1: You can't control the cycle that you're in, but the

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Speaker 1: underlying fundamentals have been tremendously compelling, both over the long term,

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Speaker 1: but then also what we're seeing specifically today in the market. UM.

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Speaker 1: You know, just just a few weeks ago, sitting down

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Speaker 1: with some of our tenants in Beijing at Honda Motor

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Speaker 1: Tower in chang Yang, and and they're expanding into new space.

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Speaker 1: We're signing new office leases in Shanghai, um at at

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Speaker 1: at at price, and that is very compelling, UM. And

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Speaker 1: so we focus on areas right now, for for example,

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Speaker 1: living China's continuing to to urbanize. UM. We're seeing a

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Speaker 1: movement of young workers around districts where there's been newly

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Speaker 1: delivered infrastructure. We're seeing that in Hong Kong, signing new

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Speaker 1: leases next to the China High Speed Rail. So in

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Speaker 1: a sense, you're just saying that, UM, this is almost

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Speaker 1: like a cyclical downturn in a very good secular market.

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Speaker 1: I think it's a fair way of saying it. UM.

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Speaker 1: You know, I'll take logistics for example, uh so, China's

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Speaker 1: e commerce penetrations about twenty five but when you pair

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Speaker 1: that with new infrastructure and just a very next gen

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Speaker 1: driving market, there's a lot of very interesting opportunity there. Uh.

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Speaker 1: Greater Bay Areas seen tremendous growth regardless of these last

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Speaker 1: few years of of covid Um. We have a facility

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Speaker 1: there that's forty five minutes to forty five million people,

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Speaker 1: and so looking even where we're sitting right now. Uh,

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Speaker 1: just yesterday, Ali Baba stated that that through China for

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Speaker 1: their pre sales for eleven eleven singles Day, about seventy

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Speaker 1: of those orders were for same day delivery. Um. It's

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Speaker 1: pretty incredible and is a trend really regardless of where

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Speaker 1: we are in the cycle, which is a wholesale wave

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Speaker 1: and change. So it's making that very important from a

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Speaker 1: real estate perspective for sure. Julia in Singapore here, I

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Speaker 1: just wanted to ask you though about the crackdown that

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Speaker 1: we've seen from President on common prosperity and reigning and

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Speaker 1: celebrity influence, which a lot of the retailers have cited

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Speaker 1: as potentially meaning that they won't get as much traction

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Speaker 1: on singles Day of people are buying, particularly because some

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Speaker 1: celebrity is spreaking a product and the like, and now

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Speaker 1: they're not doing that. What kind of I guess consume

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Speaker 1: a caution are you still seeing. So we're actually thinking

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Speaker 1: that the men and the main headline from our side

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Speaker 1: is around the big trends we're seeing in Singles Day

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Speaker 1: this year that maybe we didn't see a few years ago.

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Speaker 1: Uh So, if Single Day had tremendously been seen as

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Speaker 1: an online holiday, so billion in in gross merchandise value

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Speaker 1: and growth up a million percent since it's rollout as

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Speaker 1: a festival. But we've seen a real move to offline

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Speaker 1: experiences and sort of cross promotion online and offline. That

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Speaker 1: is new and growing as a trend. I think the

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Speaker 1: second thing that we're really seeing is an effort to

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Speaker 1: find more personalization in the purchases. So that's playing through

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Speaker 1: in a search for more sustainability. The brands are pushing sustainability,

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Speaker 1: but also in stores as a real example, we're seeing

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Speaker 1: our F and B retailers as as well as our

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Speaker 1: shops that are pushing takeaway containers. They're tied to specific

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Speaker 1: promotions coming in around Singles Day. That's exciting. We think

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Speaker 1: that trend will continue. That's pretty interesting that you're in

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Speaker 1: that kind of position where you can get flows in

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Speaker 1: certain types of business. So you mentioned just a little

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Speaker 1: bit there through retail there's some other product areas that

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Speaker 1: you see really rising on the list of of interest. Yes.

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Speaker 1: So we think this is a very interesting time around living,

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Speaker 1: particularly for next generation use living and millennials. So when

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Speaker 1: we say living in yes, so when we say living

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Speaker 1: in real estate, we mean things like rental housing, for example,

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Speaker 1: rental apartments. UM. So we're sitting in Hong Kong right now,

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Speaker 1: and in Hong Kong it takes your average white collar

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Speaker 1: worker about twenty years to be able to afford a

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Speaker 1: unit to buy, um, And so they're valuing things like

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Speaker 1: renting in very central neighborhoods, but also searching for a

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Speaker 1: sense of community. So UM, we're seeing increasing trends and

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Speaker 1: we're putting it to work ourselves of adding additional g

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Speaker 1: f A for community space, heavy programming so yoga classes, um,

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Speaker 1: shared work from home activities in units, and that's becoming

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Speaker 1: a part of people's choices. We're seeing that blend over

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Speaker 1: across the border into the mainland as well, and tremendous

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Speaker 1: opportunity there in tier one markets. What about in terms

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Speaker 1: of people kind of looking for things that are going

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Speaker 1: to be sustainable to and not looking at items that

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Speaker 1: they can quickly throw away. What kind of trends are

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Speaker 1: you seeing there? Yeah, Juliette, this is this is something

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Speaker 1: we're absolutely seeing. So first with this generation taking singles day,

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Speaker 1: three quarters of singles day shoppers or gens, your millennial,

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Speaker 1: and they have really shown to them it's important to

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Speaker 1: buy their brand and values and so UH branded UM

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Speaker 1: branded takeaway materials or bags or or or or other

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Speaker 1: things that we've seen. But UM, that is really aligning

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Speaker 1: with these large commitments that these retailers are making both

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Speaker 1: onshore but also international brands. UM. So we think of

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Speaker 1: things like carbon commitments that have been made by large

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Speaker 1: fashion brands. That's playing through in the retail environment and

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Speaker 1: also in the retail real estate environment as that becomes

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Speaker 1: part of their locational choice. Just out of curiosity. Geographically,

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Speaker 1: are there certain areas of China that are outperforming? Yes,

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Speaker 1: the smiss opportunity in the tier one markets UM. And

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Speaker 1: so we'll get Beijing, Shanghai or Town here, the Greater

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Speaker 1: Bay Area, so combination of Shinjen, Guanzhou, Hong Kong, and

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Speaker 1: then additional cities down in southern China. UM. Number one,

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Speaker 1: there's there's new active infrastructure, so high speed trains as

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Speaker 1: well as new metro stations, so it's a big opportunity

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Speaker 1: for mixed use UM. So we're seeing really a blend

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Speaker 1: of product types that's circling around these transit hubs UM,

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Speaker 1: which for us as a property developer obviously creates investable opportunity,

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Speaker 1: but we have to think of it a long term

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Speaker 1: that turn will continue. Some great ideas there, Claire, Thanks

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Speaker 1: very much, and just to the audience, you can listen

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Speaker 1: back to this interview online. You can go to Bloomberg

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Speaker 1: Radio dot com for the podcast of it, or of

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Speaker 1: course on the terminal, we've been chatting with Claire Cormier Tilky,

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Speaker 1: head of Greater China at HINZ and discussing Singles Day,

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Speaker 1: which is coming up tomorrow