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Why real estate giants like to invest in sports

Wednesday, 26 Aug 2015 17:30   |   By Hunter Cui

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Viva China Holdings Limited is going to go back public and then announce 321 million investment to purchase 29% share of CITIC Real Estate. Viva China is a major branch of Li Ning.

Viva China has two major parts in business, sports personnel management and event management. CITIC Real Estate is a wholly owned companies of CITIC, which has their major influence on business estate development.

It is not an ordinary purchase, and also reflects the tendency of market. By then, real estate giants, such as Evergrande, Wanda, Suning, Lander have pour their money in sports industry, like football club, sports event management, sport venue management and sports finance.

Why do they like investing in sports? There are for major reasons.

Sports is a promising industry 

According to statistics, the average area of sports venue per capita is less than 1.5 square meters in China. In the 5-trillion plan, China State Council mentioned that China would have a average area of 2 square meters in 2025.

That gives good chance for giants step into sports real estate. Actually, not only real estate, ticketing, hospitality, merchandising, broadcasting, sponsorship and all of the relatives are also profitable.   

Branding Exposure and Public Relations

China has terrible performance in recent years, however there are more than 300 million fans in China. Most of fans watch football, including the leaders, which means if anyone is able to win titles for China football, he will has amazing exposure. Evergrande won great reputation from the title of AFC Champions League.

Extra value for real estate

As the rising of sports industry, the mode of sports + real estate is facing new opportunity. Viva China owned several Li Ning sports theme park before invest in CITIC Real Estate.  

The sports theme park attracts more visitors than before, because of two advantages, surrounding business and accommandation. Those is assumed to boost the value of real estate. 

More possibilities in sports

Actually, real estate could do more around sports, such as sports finance, sports lottery, sports tourism, hospitality, even sports resource exchange platform.

Community O2O, a brand new industry more real estate enterprises like to try, but accomplished nothing. Now community sports maybe solve the problem.

What could enterprises in real estate do with sports? Who knows?

Source: Baidu

proofread by Raymond Fitzpatrick

Tags: sports industry,investment,Chinese football

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