Having secured another entrusted construction project, Sino-Ocean Construction Management is set to tackle the "toughest nut" in Lanzhou.

According to the official WeChat account of Sino-Ocean Construction Management recently, the consortium formed by Sino-Ocean Construction Management, China Construction Eighth Bureau, Zhongzhou Real Estate and other entities has won the bid for the Lanzhou Yuansen·New North Era F+EPC+O integrated investment, construction and operation project. Sino-Ocean Construction Management will provide whole-process development management and consignment sales services for the project.

The client of the project is Chengguan District Urban Development Investment (Group) Co., Ltd. of Lanzhou, a state-owned enterprise affiliated to Chengguan District, Lanzhou.

Located on the north bank of the Yellow River in Chengguan District, Lanzhou, Yuansen·New North Era is the core component of the overall reconstruction project of the Miaotanzi old town in Lanzhou, with a total floor area of about 390,000 square meters, making it one of the largest urban renewal projects in Lanzhou.

This is a typical light-asset construction management agency project, but different from other projects, Yuansen·New North Era is a super-large-scale old town reconstruction project that was once stranded due to historical legacy issues.

The Miaotanzi old town reconstruction project is by no means an easy task to tackle.

Public information shows that the project was once suspended due to historical legacy issues. Such projects generally face common challenges including complicated asset sorting, high multi-party coordination costs, and unpredictable development rhythm.

In response to the above difficulties, Sino-Ocean Construction Management will provide whole-process development management services covering design management, construction permit application management, planning management, project management, cost management, marketing management, and customer service.

Compared with the single construction management agency or general contracting for construction, this consortium model will connect the whole chain of "investment-design-procurement-construction-operation-delivery" to reduce the coordination cost of multiple links.

In other words, a clear division of labor has been formed within the consortium: construction entities such as China Construction Eighth Bureau undertake the general contracting capability of the project, while Sino-Ocean Construction Management outputs development management and sales management capabilities.

For the district-affiliated state-owned enterprise client, this packaged "F+EPC+O" arrangement concentrates the responsibilities that were originally scattered in multiple contracts on the same consortium.

The problem is that it remains unknown whether the management fee model can cover the additional investment in the process of reviving the suspended project. The resolution cycle of historical legacy issues often exceeds that of conventional projects, so the cashing rhythm of the construction management agency's revenue is also uncertain.

From a broader perspective, the Lanzhou project is the latest deal in a series of recent moves by Sino-Ocean Construction Management.

Previously, Sino-Ocean Construction Management has signed the Huizhou Qiyuan Huanyu Dongping Plot Project, providing whole-process construction management agency services covering from early positioning to completion and delivery. This marks its first entry into the Huizhou market, and is another implementation of its practice in the field of special asset revitalization. Positioned as a "project doctor", the company conducts project diagnosis and asset sorting first, and then assesses the development difficulties.

In industry-city integration projects such as Quzhou, Sino-Ocean Construction Management also won the bid in the form of a consortium, extending its service scope to the sales end.

This type of operation is in line with the industry trend. During this period, from the establishment of new construction management agency platforms by central SOEs, the strategic positioning upgrading of leading enterprises, to the intensive implementation of various cooperation models such as equity joint ventures, capital linkage, and EPC plus consignment sales, the relationship between construction management enterprises and clients is changing from the short-term contractual relationship of "one-time commission - delivery" to long-term interest binding linked by equity, capital or full-cycle services.

The driving force behind this is not complicated: the rate of traditional residential construction management agency continues to face pressure amid intensified competition, forcing enterprises to explore new profit spaces in the upstream and downstream of the industrial chain; while the requirements of new type of clients such as state-owned asset platforms are no longer limited to "building the buildings well", but require construction management agencies to deeply participate in investment decision-making, asset revitalization and later operation.

The market space for pure residential construction management agencies has peaked, and fields such as urban renewal and stock asset revitalization have broader space and higher added value.

The Lanzhou Miaotanzi project exactly falls into all these tracks — the superposition of urban renewal, suspended asset revitalization, and full-cycle services of EPC plus construction management and consignment sales.

Whether Sino-Ocean Construction Management can smoothly push the 390,000-square-meter large-scale old town reconstruction project to delivery and inventory clearance will become a sample to test the quality of its light-asset model; for the whole industry, the answer to whether construction management agencies can earn added value higher than conventional construction management services in complex revitalization projects will also be given by such projects.

This article is from the WeChat Official Account "View", the author is View New Media, and 36Kr publishes it with authorization.