Over the past year or so, the Labubu figurines from POP MART have sparked a blind box craze around the world, forcing Yang Qinfu, the Chief Strategy Officer and CEO of Commercial Management at CapitaLand Investments, to admit that he had misjudged the trend.

In an interview with Lianhe Zaobao, 40-year-old Yang Qinfu pointed out that POP MART's first store was opened at Raffles City Shanghai, which is under CapitaLand's portfolio. "At that time, I thought the blind box craze would fade away after two or three years. I didn't expect that thanks to Lisa, POP MART has become even more popular."

Lisa, a member of the Korean girl music group Blackpink, caused the popularity of Labubu, a creature with pointed ears, a furry body, and nine sharp teeth, to skyrocket overnight after she posted a photo of herself hugging a Labubu figurine on her Instagram account.

Hong Kong-born and Belgian national illustrator Long Jiasheng created Labubu inspired by Norse mythology and signed an exclusive licensing agreement with POP MART in 2019.

Representing one-third of fee income, commercial management is one of CapitaLand's four major growth engines.

For Yang Qinfu, POP MART and Labubu perfectly reflect the controllable and uncontrollable aspects of commercial management.

"I believe commercial management is 80% rationality combined with 20% idealism. Our malls can have the best space planning and a mix of different tenant types to drive footfall and rental income, but no one could have predicted that POP MART and Labubu would become so popular because of Lisa."

Commercial management is one of the four major growth engines for fee-related income at CapitaLand Investment. In the first nine months of 2024, this business segment's revenue increased by 14% year-on-year to RMB 281 million, accounting for approximately 33% of the company's total fee income and representing the largest share of its business.

At its Investor Day held in November 2024, CapitaLand announced its plan to expand its Fund Under Management (FUM) to RMB 200 billion by 2028. Between 2028 and 2030, the company aims to more than double its operating profit to over RMB 1 billion, with 60% to 70% of this growth coming from fee-related income businesses.

From "making money with money" to "making money with people".

Yang Qinfu said, "In the past, we were a developer who bought land and built buildings, making money with money. Now, we are more focused on making money with people, for example, through our commercial management segment, which adopts an asset-light strategy."

CapitaLand is the largest private landowner in Singapore with over 130 real estate properties. The retail malls, office buildings, mixed-use developments, commercial and industrial parks, logistics centers, and data centers held by CapitaLand, as well as its subsidiaries CapitaLand Integrated Commercial Trust and CapitaLand Ascendas REIT, are all managed by its commercial management division.

Yang Qinfu said, "The trust managers are the owners, and we are the managers. They focus on loan financing and asset valuation, while we focus on how to generate the highest income from the existing leased area. Therefore, we carry out asset enhancement plans every few years."

Despite belonging to the same CapitaLand Group, Yang Qinfu emphasized that the trusts cater to the public and investors. "Not all of our plans will be agreed upon by the trusts. They have certain requirements for return rates and dividend payout ratios, and our asset enhancement plans must be able to meet these requirements."

Competition in the Chinese market is "exceptionally intense."

Yang Qinfu, who originally oversaw only the commercial management business in the Chinese market, also took charge of the Southeast Asian market last August. He described the competition in the Chinese market as "exceptionally intense."

"We have learned from the Chinese market how to view things from the perspective of tenants. For example, a brand might open five to ten stores in Singapore, but in China, it might open 500 stores. When each store enters our malls, we will investigate what their rent-to-sales ratio is. If there are 20 stores of that brand in the entire city and a particular store ranks 20th, it may soon be eliminated. We need to help them figure out how to improve their rent-to-sales ratio. For instance, when the mall organizes events, how they can cooperate and participate."

The rent-to-sales ratio refers to the ratio of rent plus management fees divided by sales, serving as an indicator of a tenant's affordability. Compared to the amount of rent, Yang Qinfu said that commercial management places greater emphasis on the rent-to-sales ratio. In this regard, CapitaLand's asset and technology layout is a significant advantage.

Connect the three elements of people, goods, and location/venue seamlessly.