Home  Contact Us
  Follow Us On:
Advertising Advertising Free Newsletter Free E-Newsletter
      2024       2023       2022       2021       2020       2019       2018       2017       2016       2015       2014       2013       2012       2011       2010       2009       2008

REAL ESTATE: Developers shift eastward, bringing Hedong back to life
Share to

Developers shift eastward, bringing Hedong back to life

By Lesley Chai, Senior Analyst, JLL Research

BT 201608 090 03 Real Estate 54778002201002281518137301778040290 004Ten years ago, Hedong District was known as an immature area that was home to several poor-quality residential projects and old factories. Hedong District's public services, including access to public transportation, hospitals and schools, have lagged behind other core districts in Tianjin. This has led to an agglomeration of less-affluent residential communities while other districts, like Heping and Nankai, have attracted large real estate investments. As such, Hedong District features only limited commercial property stock.

For many years, this district was without office buildings that could support housing demand from white-collar workers or alluring retail projects that could attract visitors from across the Haihe River. Unfortunately, despite recent developments, Hedong District's poorer reputation persists. Even today, if you asked a local Tianjin resident what she thought of Hedong District, she would most likely describe it as "poor", "uninspired" or "underdeveloped."

However, as we continue to track Tianjin's real estate market, we notice Hedong District is making large strides in improving its infrastructure, public services and commercial property. Its recent developments will most likely play a role in transforming public opinion as it evolves into a more attractive place to live.

BT 201608 090 04 Real Estate chart1Tianjin's origins date back to Hedong District

Hedong, which literally means River-East, has a rich history and is considered the historical origin of Tianjin. Starting from Yuan Dynasty, one area called "Zhigu Village" - located along the Haihe River in what would be present-day Hedong District - served as the area's port, transporting grain from north to south China. People gradually gathered there and formed a settlement which later became a sprawling city.

BT 201608 090 05 Real Estate chart2Advanced infrastructure sets the foundation

Hundreds of years later, Hedong District is beginning to establish itself as a transportation hub. Tianjin Railway Station is located in Hedong and is the primary access point to Beijing, Wuqing and Tianjin's Binhai New Area. Beginning in 2000, the local government also invested heavily in constructing a metro line that stretches through the greater part of Hedong District.

- Construction of Metro Line 9 started in 2001, and by end-2012, it was officially completed. Later on, this also enabled people to transfer to Metro Line 2 and Metro Line 3 at Tianjin Railway Station.
- Metro Line 2, connecting the west to the east, opened in August 2013.

Hedong is also within close proximity of Tianjin's sole airport - Tianjin Binhai International Airport - in Dongli District. This makes access to the airport easier via highways and the metro than from other districts. Hedong's improving transportation network, which has boosted connectivity to other districts, regions and cities, has paved the way for more real estate development.

Recent development in real estate propels Hedong

BT 201608 090 06 Real Estate chart3
2010 was the first time that well-known developers began to explore the development opportunities within the district, especially in the area near Haihe River. Mixed-use developments were most common in the beginning. The Wanda Group developed two large, mixed-use projects in Hedong in 2010 and 2014 respectively. The Sino-Ocean Group entered the Hedong market in 2014, bringing another mixed-use project - a community shopping mall catering to kids and entertainment - alongside Metro Line 2.

In 2016, Sino-Ocean then built 15,000 sqm of Grade B office space in Hedong (Sino-Ocean International Building) which the company is actively selling. Bohai Bank - a local, state-owned bank - developed an office building on the riverside that opened in 2016 with over 70% of the space dedicated for self-use. Kerry Properties, a Hong Kong-based developer, constructed a large mixed-use project that includes high-end residential, a shopping mall and a 5-star hotel and will eventually include an office tower. Lastly, domestic developer Red Star Macalline built a large-sized community shopping mall along Jingbin Avenue, a main road in Hedong, towards end-2015.

Before the development of these new projects, it was difficult for Hedong to attract destination shoppers, white-collar workers and wealthy individuals to own and occupy property within the district. However, Wanda's entrance into the Hedong scenario in 2010 with a relatively new retail concept - a high-quality shopping mall - helped the district attract new customers from other districts and propelled local shopping environment. Home prices near the shopping mall increased at faster rates than other projects in the area.

Kerry Properties' project is perhaps an even better example. Kerry took advantage of a good location, directly on top of a metro station and alongside the river with a scenic view of downtown Tianjin to develop residential high-rises, a large-scale shopping mall and operate Tianjin's only Shangri-La hotel. In a competitive market environment for both retail and hotels, the shopping mall still has a good amount of vacant space and the hotel cannot achieve high occupancy rates all of the time; however, the complex has brought life to the surrounding area. For example, several kids-related brands and restaurants, such as Kro's Nest and Matta Pizza, made their Tianjin debuts in the project. These brands have attracted people from across the river in Heping and Nankai District. Additionally, we have also witnessed the Shangri-La hotel utilise its riverfront location as a destination for weekend trips, especially for Beijing residents.

As higher quality and better-managed projects enter Hedong District, the area will benefit from gentrification. Businesses moving to the area will generate more owner-occupier demand from white-collar workers while increasing property values should generate more investment into the real estate sector.

BT 201608 090 07 Real Estate chart4Bright outlook

Looking forward, more grand-scale projects are expected to enter Hedong. One of the largest, CITIC Real Estate's City Plaza, is located alongside the river and will include several residential high-rises, a shopping mall, a hotel and office towers. The project is expected to be fully complete within the next five years.

It is true that most of the recent development has only occurred in the west of Hedong, principally on the riverside. However, it is a good start for people from across the river to notice that Hedong is changing rapidly and it is now an attractive destination to eat, drink, shop and spend the weekend with families.

Given the recent trends of urbanisation and city expansion, formerly distant areas like Hedong will have more opportunities. Limited future land supply west of the river, like in Heping and Hexi District, will force developers who wish to enter the market eastward to rely on this district. Additionally, relatively cheaper land prices and maturing infrastructure should help stimulate more property investment demand into Hedong District.


    Subscription    |     Advertising    |     Contact Us    |
Address: Magnetic Plaza, Building A4, 6th Floor, Binshui Xi Dao.
Nankai District. 300381 TIANJIN. PR CHINA
Tel: +86 22 23917700
E-mail: webmaster@businesstianjin.com
Copyright 2024 BusinessTianjin.com. All rights reserved.