The "internet-famous" supermarket chain's move into real estate has sparked widespread discussion. This stems from founder Yu Donglai's recent statement during a livestream that after the completion of the approximately 6.5 billion yuan "City of Dreams" project, if space allows, several residential communities will be built—one for Pangdonglai employees and another open to the public.
According to his description, the construction of these communities would fully disclose architectural design materials, construction quality standards, and specific costs, selling the properties with a reasonable profit margin. Thus, news of Pangdonglai entering the real estate sector spread.
Public opinion is divided. Some believe Pangdonglai could become a breath of fresh air in the real estate industry, while others argue that the industry has barriers to entry, making a cross-sector move challenging.
From Supermarket to Mixed-Use Complex Pangdonglai's venture into real estate is not a sudden decision. Several of its core flagship stores, such as Times Square and Angel City, own their properties. Through a joint operation model, it converts traditional rent into sales revenue shares with partner brands, creating a sustainable income stream. From this perspective, Pangdonglai is already a "hidden landlord."
Expanding from supermarkets to commercial complexes, Pangdonglai has already extended its reach into commercial real estate. Around 2024, Yu Donglai first proposed the "City of Freedom" project concept, aiming to create a large commercial landmark and revealing plans to use internal funds without bank loans.
In January 2025, Pangdonglai applied to register the "Pangdonglai City of Dreams" trademark under the food and accommodation category. In November of the same year, it established the Xuchang Pangdonglai City of Dreams Trading Co., Ltd., with a registered capital of 100 million yuan. Its business scope covers daily necessities, apparel retail, film screenings, and entertainment activities.
Shortly after, Pangdonglai acquired a land plot in Xuchang's eastern district. Progress followed swiftly. In May of this year, Yu Donglai posted a group photo at a construction site on social media, with a banner reading "City of Dreams Project Commencement." He captioned it: "The time and place where dreams begin..."
Reportedly, City of Dreams is the largest single project by investment scale since the Pangdonglai brand's establishment, with construction and fitting-out investments totaling approximately 6.5 billion yuan. It is a mega mixed-use complex encompassing retail, supermarkets, cinema, dining, arcades, and hotels, with a total floor area of about 575,900 square meters.
The first phase is scheduled to open in September 2029. Beyond Phase I, future plans include building a Happiness Lecture Hall, a cultural center, and hotels. According to Yu Donglai's vision, if space remains beyond the commercial sections, it will be used for residential construction, intended not only for employee housing but also partially for public sale.
Pangdonglai's corporate culture emphasizes "freedom and love," with its relatively high employee benefits and meticulous service details often drawing public attention. For years, it has adhered to a unique business model focused on deep cultivation, avoiding expansion and financing, which has kept its presence limited to a few cities like Xuchang and Xinxiang.
In 2025, Pangdonglai's sales reached 23.531 billion yuan, a 38.71% increase from 16.964 billion yuan in 2024. It is certain that the company's approach to real estate will likely follow a slow-and-steady, quality-focused model.
Setting an Example As public interpretation of "Pangdonglai entering real estate" intensified, Yu Donglai explained on social media that the primary goal is "to create a model for real estate and property management for the industry to reference and learn from" and "to promote the improvement of quality and advanced housing concepts."
Yu Donglai stated the initiative's original intent: "To strive for healthy development without disrupting the market, ensuring the rights and interests of every resident are protected." During the real estate sector's deep adjustment period, many developers have not fully recovered from the aftermath of the high-turnover, high-leverage old model.
Against this backdrop, Pangdonglai's move to build residential properties as an example for the industry is interpreted by some as an intention to "rectify the real estate sector" and "become a breath of fresh air in the industry."
However, crossing into real estate is not easy. For instance, three days ago, Sunac's management stated at a shareholder meeting that the real estate industry still has competitive barriers and requires practical operational capabilities; simply having capital does not guarantee profitability. Therefore, it is unlikely that a new batch of companies will emerge even if the market improves, highlighting the difficulty for other industries to enter real estate.
Furthermore, property development is a capital-intensive model. Relying solely on internal cash flow without loans raises questions about whether subsequent operational turnover can be assured. Some also believe that the "reasonable profit" mentioned by Yu Donglai is difficult to define and that he is ultimately "betting on rising property prices."
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