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Health Pension Service Park Project of Siping City
2017/03/23     Source:

1. Introduction to the Project

1.1 Project Background

1.1.1 Introduction to Product

China's health care industry is facing a good development environment; the reform of the health care system and economic globalization, aging of the population, sub-health status, and technological progress creates a good opportunity for the industry. The future of China's health industry will face a new round of rapid growth; on the one hand, it continues to meet the traditional health pension needs; on the other hand, industrial upgrading constantly develops new needs. The project will build high-end health care service project based on the built 660,000 m2 of Siping City Botanical Garden and the under-construction Siping City Gymnasium, exhibition hall, museum, library, art museum etc. eight municipal venues.

1.1.2 Market Analysis

1Outlook of the Pension Service Industry Development in 2017

① The State Council pushes combination of health and pension services, and health care and medicine combination will accelerate.

In November 11, 2015, Premier Li Keqiang presided over the State Council executive meeting, decided to promote health care and pension services to better protect the old medical, the elderly and other issues. The meeting decided to promote medical integration docking, encourage social forces to set up medical and institutional integration, strengthen investment and financing, land and other support. It is expected that in 2016, the experimental work of medical and integration will be developed step by step. By 2017, the policy system, standard and management system will be set up, and health institutions or pension institutions with both medical and health services qualifications and ability will be established.

② Public pension agencies will gradually realize privatization, and social capital initiative is expected to increase

In December 2013, the Ministry of Civil Affairs issued Notice on the Implementation of Public Pension Reform Pilot, and required each place to determine at least one pension institution to carry out reform pilot. In 2015, the process of market-oriented reform of public pension institutions has accelerated, and the privatization of public pension agencies will become a trend. Public private mode virtually reduces the threshold for social forces to enter the pension industry, greatly reducing operating costs, and pension service quality is expected to increase. At the same time, as the public pension agencies will choose private pension agencies with strong service capacity, therefore the future of pension agencies must be chain-based, branding, and professional large group.

③ Under "Internet +" support, the intelligent pension service will be an important direction

At present, China's nursing care gap is up to tens of millions of personnel, and intelligent technology can significantly improve the efficiency of care and reduce dependence on caregivers of the elderly population, which provides a strong support market for the intelligent industry to be involved in large health services. According to statistics, in the United States, related intelligent pension products are more than 60,000 kinds, and it is less than 2,000 species in China. At the same time, in the policy level, "Internet + pension" has won a high degree of recognition and support. It integrates the information technology, artificial intelligence and Internet thinking and home care service system construction to carry on transformation and upgrading to the traditional format of pension service. Intelligent pension will be an important direction for the development of pension service industry, and in the future, there will be more pension smart technology practiced in the pension projects.

2 The prospect of the development of the pension industry in 2017

① The service and operation of pension facilities will be the focus in the long-term development of pension housing

As the profits of traditional real estate market are compressed, innovative and transformed pension real estate is gradually popular. The relevant state policies will provide land, tax and other aspects of support for the development of pension estate, which creates a good external atmosphere for the development of pension real estate. It is foreseeable that there will be great potentials for the business opportunities of China's pension real estate. It is expected to 2030, the pension market is expected to increase to 13 trillion yuan, with great room for development. At the same time, the pension market is not limited to the 3% of institutional pension, nor limited to the construction of the living environment of the elderly population, and the services and operations of pension facilities will be the focus of pension housing in the long term development, also the major profit sources of mature market in the future.

② The pension real estate is trapped in the predicament of profitability, and light asset operation is the trend.

In the face of this "Blue Ocean" of new pension industry, real estate companies, insurance companies and others actively lay out the pension real estate. As the cost of investment in pension real estate is high, but the rate of return is very low, and the return cycle is long, there are not many pension real estate projects that can truly gain profits. Some projects even operate at a loss. In this context, to achieve light asset operations may be the way to solve this dilemma. Japan's pension real estate is very mature, and most of the pension agency have light asset operations, generally taking the form of leasing, with lease period of 20 years. That is, sharing the rental cost throughout the operation period, which can be used for reference.

③The insurance industry will participate in the development of pension industry in multi-angle and all-round way.

In the next period, the insurance industry will further develop their own advantages, with multi-angle, all-round participation in the development of pension services from the provision of financial support, risk protection, service convergence and other aspects. First, investment in pension services industry. It will make use of the advantages of long-term investment of insurance funds, establish pension communities in the form of new building, equity participation, mergers and acquisitions, leasing, etc., and pension and health care, physical exam, medical care and recreation. Pension beds and pension service supply will be added to promote the integrated development of insurance industry and pension service industry. The second is to provide risk protection services for all types of pension agencies. The third is to develop the elderly health care combined with comprehensive pension security plan. It will actively develop the medical and insurance products for the elderly, including medical insurance, nursing insurance, accident insurance, housing reverse mortgage and other pension insurance etc.

(3) Outlook of the development of pension financial markets

① About 700 billion pension funds can be invested in stock market

In August 2015, Measures of the Basic Pension Insurance Fund Investment Management was promulgated, which explicitly allow not more than 30% of the pension fund can enter the stock market. According to the Ministry of Finance budget, pension fund expenditure in 2015 was 2258.154 billion yuan, and three-month capital size was 556.4 billion yuan. Therefore, the amount of pension funds that really needs to invest is no more than 2.5 trillion yuan, and because of 30% upper limit, the actual amount in stock market will not exceed 700 billion yuan.

② The prospects of pension fund market are bright, and the management main body is expected to expand.

The introduction of Measures of Basic Pension Insurance Fund Investment Management clearly states to allow pension fund enter the stock market, allowing pension funds to invest in major national projects. In addition, the Ministry of Human Resource and Social Security is promoting national pension co-ordination, delaying retirement age etc. policies, which provides more institutional protection for the future pension funds. The prospects of pension fund management market will be more clear. At present, the pension insurance company is the only agency specialized in management of pension fund management business. In the future, the pension insurance companies, pension fund management companies and other pension insurance professional institutions established by insurance, banking and other financial industries and private capital will also join this market.

③ Commercial pension insurance policy will welcome the good opportunity, and the market scale will accelerate the expansion

In November 2015, the CIRC issued Opinions on Speeding up the Development of Modern Commercial Pension Insurance (Draft). The first one is to support commercial insurance products to become the major undertaker of personal and family business pension; the second is to explicitly support the commercial pension insurance to actively develop the elderly accident insurance, elderly housing reverse mortgage insurance and other dozens of pension insurance products; the third is proposing the commercial pension insurance funds to enjoy the same treatment with the raised funds in listing. At the same time, it will support the pension security management products, asset management products of professional pension insurance institutions to enjoy the same treatment with other financial institutions in the process of opening inter-bank market accounts and securities market accounts. Commercial pension insurance development will usher in the best policy environment, and it is expected that in the next five years, the market size of commercial endowment insurance will be more than 3 trillion.

(4) Outlook of investment and financing trend of pension industry

① Investment body will gradually be diversified, and private, foreign capital meets the good opportunity

In recent years, China's pension industry support policies are intensively introduced, which plays a role in promoting social private capital to be “shortlisted” in it. The policy of 2015 explicitly supports "let private capital become the main body of the pension industry," and stresses the strengthening of financing, tax concessions, personnel and other aspects of protection. It is expected that the bottleneck of private enterprises in the aspects of personnel, land, capital etc. will be alleviated, and the enthusiasm of private capital to participate in the pension industry is expected to increase. At the same time, foreign investment also shows a strong interest in China's pension industry.

② PPP model may become one of the important financing methods of the pension industry

As an industry with growing scale and promising prospects, the development of pension industry is in urgent need of social capital support. Since 2014, the State has repeatedly issued a document to encourage innovation and investment mechanism in key areas, and promote the government and social capital cooperation (PPP) model, which provides a very good opportunity for private capital enter the pension industry. By the end of May, 2015, of 1043 PPP projects released by the Development and Reform Commission, there are 38 pension service projects, with a total investment of 20 billion yuan. It is the first choice project in the public service areas of each province. Seen from the national PPP demonstration projects released by the National Development and Reform Commission and the Ministry of Finance, pension is also one of the key promotion areas of PPP. It is expected that the PPP pension projects announced before 2016 will continue to be settled.

1.1.3 Planning Scheme

The construction mainly includes creating a pension service park integrating pension, leisure vacation, health spa, tourism and performing art, comprising: apartments for the elderly, elderly university, elderly centers, elderly training centers, elderly leisure centers, with the construction of "elderly ecological health products exchange area ". This region will gather a variety of products for the elderly, such as eco-green food, clothing for the elderly, elderly equipment supplies, and the region will become a large logistics and distribution center of elderly supplies.

It will construct nursing homes, rehabilitation hospital for the elderly; through the construction of the rehabilitation hospital, it will provide Continuing Care Retirement Community, abbreviated as CCRC. CCRC is a comprehensive community service for the elderly. The goal of the CCRC is to meet the needs of the elderly with different physical health conditions through a full range of professional services within the community and to further improve the lifestyle and quality of life of elderly persons. At present, the CCRC community usually provides self-care, assistant, nursing integration of residential facilities and humanized professional services for the elderly.

1.1.4 Favorable Conditions for Project Construction

The project is located in the northwest corner of the Botanical Garden, with exquisite regional environment and complete main service functions. The east side of the project site is adjacent to the under-construction Siping Stadium, Exhibition Hall, Museum, Library and Art Museum etc. eight municipal cultural and sports centers. In the south, it borders the international high-end education park integrating international elementary education, elementary school, middle school, high school and international academic exchange. In the west, it borders office, tourism, hotels, restaurants, catering, entertainment, finance, office buildings, commerce etc. comprehensive services business district before the Siping high-speed rail station; in the north, it is the municipal institutions, thus the geographical location is extremely advantageous.

The completed Siping City Botanical Garden and Dongshan Sapling Nursery Wcological Restoration project covers an area of 1,000 mu (660,000 square meters), with the original greening area of 350,000 square meters. Based on the original Dongshan Sapling Nursery, it carries on ecological restoration and upgrading, uses modern gardening ideas, enriches landscape, improves the ecological and environmental benefits of the original green space, reflecting the national guiding ideology of sponge city. According to the original topography, the park has all levels of garden road, fitness trail and various leisure squares, 40,000 square meters of artificial lake, 40,000 square meters of 40 meters high artificial mountain, scenic stones and waters, Nalan building, waterside business street, indoor greenhouse plant exhibition hall, water entertainment square, the ribbon bridge, ferris wheel, Tai Chi square, badminton courts, calligraphy square, cultural wall, lotus pond etc. 32 scenic spots and scenic areas. The variety of outdoor and indoor plant species are more than 1,000 species. Meanwhile, the introduction of new varieties for introduction and domestication provides the public with a science base for understanding the nature and learning plants. It enriches the quality of residents, and provides a beautiful environment for the project.

1.2 Project Construction Contents and Scale

1.2.1 Product Scheme and Scale

The project covers a total area of 260,000 square meters, including 43,000 square meters of commercial and financial industry, residential area of 217,000 square meters.

The total construction area is 780,000 square meters, including 130,000 square meters of commercial and financial industry, and residential area of 650,000 square meters.

1.2.2 Construction Contents

It will mainly construct a pension service park integrating pension, leisure vacation, hot spring health, tourism and performing arts, including: elderly apartments, elderly universities, elderly activity centers, elderly care training centers, elderly leisure centers and the "elderly ecological health products trading area."

1.3 Total Investments and Funds Raising of Project

It is expected to be 3.64 billion yuan. (Commercial and financial industry is expected to be 1.04 billion yuan, and residential area is expected to be 2.6 billion yuan.)

Table 1 Summary List of Total Investments of Project   Unit: 10,000 Yuan

Serial No.

Name of Expense

Investment Amount

Percentage to Total Investment

Remarks

1

Construction Investment

291200

80

 

2

Interest Incurred in Construction Period

 

 

 

3

Working Capital

72800

20

 

 

Total Investments of Project1+2+3

364000

100

 

1.4 Financial Analysis and Social Evaluation

1.4.1 Major Financial Indicators

The project does not take into account real estate income, and is expected to achieve average annual operating income of 1138.33 million yuan, annual profit of 114.28 million yuan. The investment payback period is 8 years (after tax, including the construction period of 1 year), and the investment profit margin is 14.2%.

Table 2     List of Major Indicators for Financial Benefits Forecast

Serial No.

Name

Unit

Indicator

Remarks

1

Operating Income

10,000 Yuan/a

113833

Normal Year

2

Total Profits

10,000 Yuan/a

11428

Normal Year

3

Financial Internal Rate of Return of All Investments

%

5

After income tax

4

Financial Net Present ValueIc=10%

10,000 Yuan

300000

After income tax

operation period of ten years

5

Payback period of All Investments

a

8

Including construction period of one year

(after tax)

6

Profit Margin of Investment

%

14.2

 

Note: the "10,000 Yuan" in the table refers to RMB.

1.4.2 Social Evaluation

The project will construct six systems of community health care system, health promotion system, community health system, three-dimensional multi-dimensional landscape system, building technical standard system and perfect supporting service system to ensure the normal operation of the pension project in the ecological health care and pension comprehensive service park of the botanical garden, meeting the features and needs of the elderly from material and spiritual life two aspects, thus matching and supporting this new model of community pension from form and contents. Good economic and social benefits can be achieved.

1.5 Cooperative Way of Project

Land transfer, sole proprietorship, joint venture and cooperation.

1.6 Construction Site of Project

North and South corner of the Botanical Garden of Siping City Economic Development Zone.

1.7 Project Progress

Planning has been completed, and land indicator has been approved. The land has completed demolition and land reserve, and is mature and net land. The planning supporting network has been completed and opened to traffic.

2. Introduction to Partner

2.1 Basic Conditions

Company NameSiping City Economic Development Zone

Legal Address East Outskirt of Siping City

2.2 Overview

Siping Economic Development Zone covers an area of 25.5 square kilometers. It has a total population of 6,943, governing Tiedong, Changfa, Hejiaxinzi three villages, and 17 natural villages; Tiedong Economic Development Zone covers an area of 20.51 square kilometers; the southeast new town covers an area of 5.86 square kilometers. The newly established Liye Village and Xiaotazi Village covers an area of 30.58 square kilometers; the two villages have a total of 18 natural villages, with the total population of 9016. The area has existing 208 industrial enterprises in the region (67 in the Economic Development Zone, and 141 in Tiedong Economic Development Zone), of which: above-scale industrial enterprises are 51 (12 in the Economic Development Zone, and 39 in Tiedong Economic Development Zone). The cumulative total industrial output value is 100.8 billion yuan. It has initially formed medicine, food, special vehicles, machinery processing, bio-agriculture, optoelectronics industry, modern service industry and other industries.

In the area, the supporting facilities are reasonable in layout, complete in functions and excellent in environment. There are 10 municipal venues, such as the gymnasium, ice skating hall, exhibition hall, museum, library, art museum and grand theater, which have been completed or in construction. There is the completed Siping City botanical garden tourism and leisure destination that cover 660,000 square meters (1000 mu); the city housing provident fund, immigration hall and other municipal administrative office etc. five services departments have been completed; there are eight commercial real estate projects represented by "Wanda Plaza", "Hongxing Meikailong Mall” etc. city complexes; currently, there is one college, that is Jilin Vocational College of Engineering, with more than 5,000 students in school; one city key on high school, junior high school, primary school respectively, and one top three general hospital.

2.3 Contact Methods

Postal code: 1360000

Contact PersonZheng Xiaohui, director of Economic Cooperation Bureau of Siping Economic Development Zone

Telephone0434-6126057   18643455688  

Email154187483@qq.com

Contact Methods of Project City (Prefecture)

Contact UnitSiping City Economic and Technological Cooperation Bureau

Contact PersonSong Qingxin

Telephone0434-3266211   13844482608

Email417856658@qq.com

Websitehttp://investsiping.com    

 

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