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How can park commerce break away from traditional models and reconstruct urban leisure and commercial spaces?

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2024-09-11

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How to create a new park-style commercial complex that meets the needs of today's consumer characteristics? This is a new problem that crosses the boundaries of the tourism and commercial fields. Let's try to systematically analyze this type of problem.

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Editor | Yang Ming

Editor in charge | Jing Xiangyuan

Source |匠工营国

Urban parks and modern commerce are two important modern urban public elements. In the past, they watched each other develop along their own paths, with parks providing ecological value and commerce providing consumer value. But now they are both rushing towards each other: on the one hand, many businesses want to become as fresh and pleasant as parks, attracting popularity and escaping industry involution; on the other hand, many municipal parks are also trying to figure out how to generate more economic benefits like businesses.

This situation was not obvious in the past, but it has become a trend in the past two years. The underlying reasons are:

1. Relaxation has become a popular element in commerce. Today's popular social and curated commercial spaces require more public space support. And if the business can be close to the city park, it will be the ideal carrier.

2. With the end of the land finance model in various places, the maintenance of a large number of municipal parks consumes a lot of cash flow. Against the backdrop of tight government finances in various places, municipal parks also need more revenue to achieve their own revenue balance and reduce the financial burden.

Two highly potential park commercial models

Not all parks have the potential for operational value. Depending on the location and scale, parks are divided into many categories, such as urban comprehensive parks, community parks, suburban parks, sports parks, wetland parks, forest parks, riverside parks, pocket parks, etc.

From the perspective of commercial operation potential, the two most valuable types of parks in the future are:

1. Parks located in urban commercial districts

The most valuable point of this type of park is its location in the urban center. In terms of spatial scale, they may be a small comprehensive park, a community park, or even a pocket park on a street corner, with an average area of dozens of mu, or hundreds or even thousands of mu, and some as small as a few mu.

Because these projects are located near mature urban commercial districts, their inherently good location determines the excellent commercial value of the park itself.

2. Parks located in urban micro-vacation zones

In comparison, various suburban parks or riverside parks that are far from the core commercial districts of large cities have weaker commercial value due to the lack of support from the surrounding commercial district popularity. But they also have an unparalleled advantage, that is, these projects are often located within a 1-hour urban micro-vacation zone, so they also have good commercial development potential.

However, unlike the commercial areas in urban parks, which have a unique advantage in passenger flow, their development needs to refer to the model of resort destinations, and creating tourist attractions is the first priority.

In addition to the relaxation and leisure functions of urban parks, this type of project must be related to the surrounding vacation and entertainment functions. The most representative example is Panlong Tiandi in Shanghai.

Three major types of park commerce

From the spatial relationship between parks and commercial buildings, park-style commercial areas can be roughly divided into three categories according to the distance between commercial areas and parks and the green coverage rate:

1. Watch-type park commerce - forest value 30~50%

This is a typical park-oriented development (POD) model, which uses the characteristics of large-scale customer gathering in parks to arrange shopping centers, restaurants, and other commercial formats around the park. The commercial areas here are generally located next to the park, fully enjoying the green supporting facilities of the park, while also being able to face the street and fully connect with the existing commercial districts.

In the central urban areas of large cities, these are the best areas for such projects to grow. For example, Hibiya Park in Tokyo, Central Park in New York, and Zhongshan Park in Shanghai. The establishment of these important urban parks will form a park commercial zone in the surrounding area, and the park itself will naturally become a place where various public and commercial activities compete to be held.

In the early years, the best example of this type of project was Xixi Impression City. This large-scale ecological shopping center, which opened in May 2013, overlooks the adjacent Xixi Wetland Park. Compared with various ecological commercial projects that have opened successively later, it has always been an industry benchmark.

Since its opening, Xixi Impression City has been operating well and is currently one of the top 10 shopping centers in Hangzhou, with annual sales exceeding 3 billion yuan.

Here, the green rest space of the forest commercial area is one of its characteristics. Various stepped terraces and rooftop gardens that rise with the levels of the mall are combined with the surrounding wetland environment. On the roof of the project, there will be various ecological formats, such as "sky farms," "sky football fields," and "sky cat cafes." There is also a unique viewing platform overlooking Xixi Wetland, as well as various ecological themed exhibitions and camping markets held by the market. From space to formats, this is an ideal slow-life experience space.

However, for this large commercial complex with an area of over 100,000 square meters, the role of location and scale is far greater than the park's ecology itself. The park's ecology is more of a characteristic and highlight of the entire project. The ecological theme of operational activities can indeed enhance the reputation and reputation of the entire project.

PARK 2 represents the evolution of park-style commerce. The core of this evolution is the evolution of people's needs for space. The unrestricted outdoor park life and natural cultural settlement space here have become the core elements that attract young people of Generation Z.

2. Immersive park commerce - forest value 80%

Compared with the first type of comprehensive commercial area, the immersive commercial area hidden inside the park is much smaller due to the limitations of construction land, with a basic scale of less than 20,000 square meters. This is the deepest green park commercial area, with a forest value close to the maximum, and the park is their most fully equipped supporting facility.

The most representative of this type of project is REGULAR Yuanye in Chengdu.

From the essence of REGULAR Yuanye's positioning, it is actually very similar to Caowu Square in Taichung, and the two are very similar.

Located in the sunken plaza of Chengdu Dayuan Central Park, REGULAR, with a relatively small area of only 6,500 square meters, is situated within the larger Dayuan Park, which covers approximately 351 mu (approximately 23.4 hectares). The entire project encompasses three sunken outdoor gardens and a public art space, bringing together over 20 lifestyle brands, including bakeries, cafes, restaurants, flower shops, barbershops, boutiques, and natural art studios.

To support the project's operation, REGULAR designed the gregarious public art space amidst the three gardens. Through constantly updated exhibitions, pop-up shops, and limited-time spaces, the space is kept dynamic with content, creating a bridge for deeper communication among visitors. The project also features ample seating, allowing people to relax, read, or chat, aiming to foster a sense of ease within the public space.

The shops also have a strong relationship with the surrounding park. For example, the FINE·PARK restaurant inside promotes a "picnic" concept, encouraging people to bring food to the park and enjoy an outdoor picnic.

3. Intentional park commercial - forest style within 30%

These are commercial projects that primarily feature ecological green spaces and park-like settings. Although not directly adjacent to parks, they aspire to evoke a park-like atmosphere. Often located in bustling city centers with extremely valuable surrounding land, these projects utilize ecological green themes to highlight the relaxed, resort-like feeling of "returning to nature" that is desired in the core areas of large cities. This is reflected in both outdoor landscape plazas and indoor atriums.

Among large shopping malls, Chengdu Dàyuèchéng and Chongqing Guanghuan are typical examples of this type of project. They have created large-scale park landscapes in their outdoor plazas and indoor atriums, gaining popularity in their local markets. More distinctive is Shanghai Suhewan Mixc, a shopping mall sunken into a canyon park, which is also deeply loved by the market for its strong forest-like atmosphere and artistic temperament.

In terms of street-style commercial areas, Hangzhou Yuniãojí and Tianmuli, which focus on forest-style commercial spaces, have gained immense popularity in the Hangzhou market with their lush green park atmosphere, becoming two of the most popular projects in the city.

Review of Japanese Park Commercial Experiences

Currently, many of China's older, more developed cities have moved beyond the "Park City Construction 1.0" stage, which focused on achieving a certain "coverage rate" of green, open spaces.

In the "Park City Construction 2.0" stage, the creation of urban parks should not only focus on "existence" and "quantity," but should shift the emphasis from "coverage rate" to "attractiveness," paying greater attention to the functionality and appeal of parks.

1. Japan Park - PFI system

In comparison, Japanese urban parks seem to face even more challenging issues.

Firstly, many parks were built earlier and their facilities are severely damaged and outdated, with many located in prime urban areas and requiring renovation. Secondly, due to declining population numbers, urban shrinkage, and tight local finances, high-quality renovation and operation cannot be achieved solely through government efforts.

Therefore, Japan enacted amendments to the Urban Park Act in 2017, officially introducing the Park-PFI (Private Finance Initiative) system. The core of this system is to involve private entities in park operations, relaxing restrictions on the construction of certain commercial facilities to allow businesses to profit. In exchange, businesses must partially return profits through renovation, development, and operation of the park and surrounding areas to enhance park quality and attractiveness.

▼ Park-PFI system diagram

Through this policy innovation, Japan hopes to inject new vitality into urban green spaces that have entered the "aging" phase, transforming city parks from the "uniform" "sandpit, slide, and swing set" to "diverse and vibrant parks with unique charm," truly becoming a green public asset of the city.

▼ Definition and subcategories of "urban parks (都市公園)" in the Japanese context

For businesses, the appeal of this act lies in "long-term operation" and "relaxed building coverage rates."

Park-PFI is not Japan's first system to introduce private entities into park operations, but compared to previous PPP models, Park-PFI extends the management period of parks by businesses from 10 years to 20 years. This long-term operation means a greater possibility for businesses to recoup costs and profit, encouraging greater upfront investment.

More importantly, the act makes concessions on the building coverage rate of parks, relaxing it from the previous 2% (strictly ensuring open space) to a maximum of 12%. These additional buildings can be used to construct profitable facilities for commerce, sports, recreation, and entertainment. The act also allows businesses to set up convenient facilities such as bicycle parking lots and billboards, further increasing their incentive to participate.

▼ Three main policy characteristics of Park-PFI

The government can achieve "fiscal relief" through this. Under the Park-PFI system, urban park spaces are divided into three categories: profitable facilities, public facilities, and open spaces without facilities.

Private enterprises are fully responsible for the renovation and operation of profitable facilities, as well as the daily maintenance and repair of public facilities such as squares, flowerbeds, roads, and fountains. Local governments and public organizations only need to provide 50% of the funds for the preparation of public facilities (the other 50% comes from the return of business profits) and long-term loans for park renovations.

▼ Park-PFI regulations on funding sources for different facilities

To prevent private enterprises from "misrepresenting" after obtaining park operating rights, Park-PFI has strict process control. The government will first propose the general direction of park renovation, and enterprises will develop detailed proposals accordingly. After proposal selection, the government selects the winning bidder, and both parties negotiate again to determine the renovation plan, finally concluding the cooperation and entering the implementation phase.

▼ Park-PFI implementation process

Since its launch, Park-PFI has been welcomed throughout Japan. By September 2019, 35 parks had officially implemented it, and since then, hundreds more parks have been discussing its introduction.

2. Parks + Commercial Activation of Scene Consumption

For green spaces located in prime urban areas, "doing business in the park" is the most suitable option.

With the convenience of online shopping, the trend of offline commerce moving towards "scenario-based," "experiential," and "interactive" development is becoming increasingly apparent, with "park-style commerce" incorporating ecological elements becoming more prevalent. The green foundation of urban parks provides an ideal supporting scene for consumption. These central parks also have a large volume of foot traffic, which is an invaluable advantage for commercial operations.

▼ Starbucks in Ueno Park, Tokyo

The most active private sector players in this type of transformation are the major developers, represented by Mitsui Fudosan.

As a long-established commercial operator in Japan, Mitsui has created numerous hit commercial products such as Lalaport, Lalaterrace, and Mitsui Outlet Park. "Park + Commercial" is Mitsui's latest attempt to explore the next generation of commercial formats.

To this end, Mitsui has specifically created the "RAYARD" product line for park commercial operations based on the Park-PFI system, and has already developed two flagship projects: Miyashita Park and Hisaya-odori Park. Hisaya-odori Park is currently the largest Park-PFI project in Japan and has the strongest commercial transformation attributes.

Hisaya-odori Park is located in Sakae, the most prosperous area of Nagoya. Starting from the Nagoya TV Tower in the city center, it gathers famous landmarks such as Oasis 21, the Aichi Arts Center, and the NHK Nagoya Broadcasting Station.

In addition, the three major shopping centers known as "Nagoya's 3M"—Matsuzakaya, Maruei, and Mitsukoshi—are also nearby, making it a true "golden urban area." Mitsui is responsible for the transformation of the "North Area" and "TV Tower Area" of Hisaya-odori Park.

▼ Management system and cost agreement for Hisaya-odori Park

Mitsui has maximally preserved the ecological characteristics and public welfare attributes of the park, transforming the park green space into a more attractive "urban outdoor" consumption scene deeply integrated with business attributes.

In Hisaya-odori Park, Mitsui replaced the original tall trees that obscured the view with a large area of "American-style" open lawns, creating not only a more open and comfortable visual corridor but also a high-quality public activity space, attracting more people.

On the large lawn, visitors can use free rental simple tents and hammocks (¥500 per use). Board games, badminton, and other game equipment are also available for free rental, and free outdoor movie screenings and various fashionable events such as coffee expos, cosplay conventions, and street drummer gatherings are held.

▼ Hisaya-odori Park before the renovation

The commercial formats in the park are highly matched with this outdoor style. Mitsui uses "first-store economy" and "innovative formats" as a lever to introduce many scene-based "urban outdoor" businesses into the park, allowing consumers to directly "see" the usage scenarios of the products, thereby stimulating their purchasing power.

▼ The renovated "Urban Resort Forest" area

For example, Hisaya-odori Park has collaborated with Snow Peak, the "LV" brand in Japan's outdoor field, to create an innovative commercial complex integrating "outdoor camping office + dining + indoor camping office + product sales." Consumers can not only see the scene-based display of products but also experience their charm firsthand.

In addition, Hisaya-odori Park has introduced innovative commercial formats such as a cyclist-friendly "bicycle cafe" in collaboration with Italian manufacturer Bianchi, and T4 NAGOYA, Japan's first "table tennis sports complex" consisting of outdoor and indoor courts and a specialty bar.

▼ Hisaya-odori Park's "sports and social" area

▼ Interior view of Snow Peak store in Hisaya-odori Park (Source: Flickr)

In terms of facility construction, Mitsui has achieved a "balanced approach." Based on the linear north-south extension, spatial segmentation by roads, and discontinuity of Hisaya-odori Park, commercial facilities are set up from south to north, allowing popularity to be effectively transmitted within the space.

At the same time, it is not overly dispersed. On the one hand, it is concentrated in the "new landmark" area where the TV tower is located, creating a popular consumption center with dining and shopping functions in the area with the highest concentration of tourists;

On the other hand, it focuses on the layout of more distinctive and targeted formats in other areas, such as "bookstore cafes," "children's English fitness clubs," and "urban micro-manufacturing cafes."

▼ Dense commercial facilities in Hisaya-odori Park (Source: Wikipedia)

▼ The "TV Tower Area" as a landmark (Source: Wikipedia)

The architectural style of the commercial buildings is also fully integrated with the park's characteristics. Mitsui adopted a simple, fashionable, and dynamic style with white and gray as the main colors and vertical lines as the main elements, creating a series of detached single-building structures on both sides of the green belt.

These buildings mainly use materials such as ALC panels, which can be easily dismantled after operation. In terms of appearance, these single buildings are not "uniformly standardized," but are individually designed under a unified style, creating visual changes that allow tourists to "enjoy the fun of shopping."

▼ Commercial building style in Hisaya-odori Park (Source: Wikipedia)

▼ A mist fountain was created under the TV tower, creating a scene that "echoes" the TV tower, forming a popular check-in spot (Source: Wikipedia)

3. Park + Accommodation: Hot Suburban Resort

For suburban parks that are far from the city center and lack attraction, they can be reshaped by strengthening "characteristic accommodation."

In the 1960s and 1970s, Japan built a large number of suburban parks, one of which is the "Children's Nature House" in Numazu City, Shizuoka Prefecture. It was originally a nature education institution serving "children's holiday camps" in surrounding cities, used as a place for students to participate in outdoor activities and get close to nature.

With the decrease in the local population and changes in education programs, although the Children's Nature House is no longer open to the public, it still incurs tens of millions of yen in maintenance costs each year, becoming a "burdened public facility" for the government.

▼ Location of Numazu "Children's Nature House"

The renovation idea for the Children's Nature House is to maximize the use of "soft decoration" to reshape its attractiveness, using a method of "clever strength, light start, and heavy dissemination" to achieve popularity activation and generate consumption.

After investigation, Tokyo R Real Estate Co., Ltd., which is responsible for the renovation, believes that it has the advantage of being 1.5 hours' drive from the large Tokyo market. If the large lawn and forest are used well, there is a great opportunity to create a "suburban resort accommodation destination."

Accommodation offers more than just hotel fees; it can also generate diverse consumption, such as dining and evening activities, making it the best choice for saving these suburban parks.

▼ Many golf courses, campsites, and large parks are distributed around the "Youth Nature Home," offering excellent resort advantages.

Therefore, R Real Estate has set out to create a "net-red" accommodation magnet, targeting the preferences of young people and families in Tokyo with high spending power.

Using the gimmick of a "park where you can stay," it has created diverse and fashionable accommodation experiences, including treetop hanging "spherical tents," "wooden house hotels" converted from existing collective dormitories, and "luxury tents" on the lawn.

Not only has it not added more buildings, but it has also created an "Instagrammable" aesthetic scene without spending much. Furthermore, the R Real Estate team pays special attention to topic operation; for example, before opening, it used a public relations company to release the iconic dreamy night view of the "treetop spherical tent" on platforms such as SNS, attracting a large amount of attention from the start.

▼ The popular "spherical tent" (Source: Wikipedia)

In terms of extended experiences beyond accommodation, R Real Estate has chosen to densely implant open-air movies, music festivals, bonfires, mobile cafes, and camping around the large central lawn square to attract the attention of fashionistas.

▼ Campsite (Source: Wikipedia)

In 2019, INN THE PARK held the "Forest Film Festival Intertwined with the Night Sky." Four open-air screens were set up on the large lawn, creating a romantic "lawn cinema" and an open-air market. A shuttle bus from Shinjuku was also provided to attract the target customer group. This event attracted more than 2,000 people to stay overnight.

In the same year, INN THE PARK collaborated with Isetan to create an outdoor fashion market that included art exhibitions, music festivals, and gourmet camping, which also achieved considerable popularity.

▼ Numazu "INN THE PARK" renovation concept diagram

4. Park + Cafe: Reshaping Prime Locations

In addition to large parks, many neighborhood parks and pocket parks in Japan utilize the Park-PFI system to revitalize popularity and consumption. Introducing cafes is almost a "standard choice" for these parks. This measure not only caters to the daily coffee consumption habits of the Japanese people, but also, due to the vibrant and fashionable nature of coffee shops, effectively attracts young people and extends their stay. For example, Musashino Forest Park, operated by the well-known Japanese publishing company "Kadokawa Culture Promotion Foundation."

▼ Kadokawa cultural facilities and parks complement each other

First, a cafe designed by Master Kengo Kuma was built in the forest, where visitors who come to "make a pilgrimage" to Kadokawa culture can rest, drink coffee, and buy local products. Second, the well-known company teamLab was invited to create permanent interactive digital installations and light art in the park, forming a highly distinctive check-in location with a cultural tone.

▼ Cafe and art installations in the forest (Source: Wikipedia)

For example, in Shibuya Kitaya Park, Tokyu introduced the popular brand "Blue Bottle Coffee" and flexibly incorporated commercial content in the form of outdoor displays and short-term pop-up events to boost popularity and increase revenue.

▼ Shibuya Kitaya Park (Source: Wikipedia)

5. Park + Service: Improving Residents' Lives

Some Park-PFI projects also have the attributes of comprehensive community services. For example, "Meijo tonarino" located in Nagoya Meijo Park. This project mainly targets residents of the surrounding community and students of Aichi University, and is a service node built on the concept of "community-supported park." This attribute is fully reflected in the functional settings.

For example, based on the attribute that Meijo Park is a "popular running spot," it has created affordable shower rooms, changing rooms, massage parlors, running equipment sales, and coffee and dining facilities. For university students, it has created entrepreneurial food trucks and creative markets.

▼ Meijo tonarino, a community-supported park

▼ Meijo tonarino and surrounding residential areas, Aichi Gakuin University, etc.

In general, we have moved from the Park City Construction 1.0 stage, which pursues the "coverage rate" of urban parks, to the Park City Construction 2.0 stage, which pursues the "charm" of urban parks.

During this period, urban parks must cater to the upgrading of residents' consumption needs and changes in their lifestyle pursuits, extending more personalized functions such as "urban outdoors" beyond the "standard configuration."

In this process, in order to achieve reduced burden and profitability in park operation, it is necessary to introduce private sector forces and explore more possibilities through institutional innovation, such as "park + commerce," "park + accommodation," and "park + service."

It is hoped that this article, through the introduction of Japan's Park-PFI system and related cases, can contribute some inspiration and direction to China's park city construction and urban park renewal.

Key Points in Creating Park Commerce

From the various cases analyzed above, it can be seen that park-type commerce has become an important type of non-standard commerce. So, from the perspective of operation and implementation, what are the key points for such projects? I think it can be summarized into these points:

1. Build a large-scale linkage between the park and commerce, making the park an "ecological functional body"

The core point here is the reasonable utilization of surrounding park green spaces. The landscape itself is the foundation of the project, but now every city has dozens or hundreds of parks. If there is only the natural landscape of the park, it generally does not have much appeal. At this time, it is necessary to combine cultural and tourism content to transform the park landscape into a content-based space.

It can be a performance space, a healing space, a recreational space, or even a social space.

Within this positioning context, various content-based business models, such as concerts, children's playgrounds, sports fields, themed markets, product launches, cultural exhibitions, and various themed events, are the most important functional spaces in a park. Furthermore, these spaces can be continuously enriched and will possess various possibilities in the future.

At this point, in the spatial relationship design between the park and commercial areas, reserving various "venues" is crucial. Leaving space blank is equivalent to reserving a large stage for operation, which can become a constantly adjustable operational space in the future. Commerce, then, becomes the most important support and complement within these operational activities.

2. Ingenious Design, Creating a Relaxed Atmosphere

From the cases of REGULAR Yuanye and Caowu Square, we can see that park commercial design should be free and unrestrained, possessing a romantic spirit, rather than simply traditional streets or boxes.

The creation of this relaxed atmosphere should be consistent with the theme of naturalism, fully employing innovative designs in various visual presentations, including architecture, landscape, signage, and layout.

These innovative designs are the best showcase of the business philosophy; they represent vitality and creativity.

3. Precise Merchant Selection, Strong Operations

Conventionally, there are three main models of commerce surrounding parks: firstly, in-park commerce, which involves operating specialty restaurants, specialty crafts, bookstores, and other small retail businesses within the park to meet the basic needs of park visitors.

However, if only these business brands are recruited, it can only be considered supplementary and cannot form its own theme or characteristics. The shops here should possess park operational capabilities; they will combine the excellent park environment to conduct their own themed exhibitions or recreational activities. The strong operational capabilities of each shop, linked together, can form a collective IP for the project.

Summary

Overall, park-style commercial areas are increasingly favored as people place more importance on ecological, environmental, and healthy lifestyles. Furthermore, the operational pressures on various municipal parks in China have made the relationship between parks and commercial operations increasingly close. The renovation and upgrading of numerous municipal parks will be an important topic in China's future. However, the difficulty and breadth of park commercial operations have far surpassed traditional commercial models; these projects require a higher level of integration of various industrial resources. This requires a team with strong cross-border operational capabilities to carry out comprehensive coordination.

In addition, there are some red-line issues to note regarding the operation of such projects:

First, the issue of the legality of construction land. Since most park land belongs to park green space, finding suitable construction space is relatively difficult. Most parks have their own ecological red-line boundaries; renovation and operation must be consistent with ecological environmental control.

Second, the issue of operational safety. Most riverside parks have their own drainage and flood prevention functions; the creation of waterside commercial areas in such riverside parks must pay attention to these issues. In addition, many forest parks have strict fire prevention requirements; these controls will impose hard constraints on activities and commercial operations within the park, and the renovation process must pay more attention to avoiding various safety tragedies.

The above analysis is only a basic summary of the basic characteristics of park commerce.

In summary, park-style commercial areas are a new species that combines cross-border elements from multiple fields, including landscape, curatorial work, activities, commerce, amusement parks, and operations. Its healthy operation requires a higher level of aesthetics, more creative planning, stronger connections to cultural tourism and commercial resources, and richer curatorial activities to form a competitive advantage over ordinary physical commercial areas. Because the situation of each project varies greatly during the specific implementation process, establishing a cognitive model, resource model, operational model, and financial model for such projects to form a sustainable operational methodology is the long-term solution.

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