Location & context
- Address
- 沙溪镇 (Shaxi Town), near 中心幼儿园 (Central Kindergarten), Zhongshan, Guangdong
- Street type
- Industrial street — active ground-floor commercial, many restaurants already operating nearby
- Building
- Existing 5-story 15 × 30 m shell · 3 roll-up doors on north (rear) wall · person door on west wall · concrete frame, flat roof
- Neighbors
- 2 m gap to buildings east and west · restaurants, shops, small factories on same street
- Implications
- Restaurant on L3 not recommended — the street already has plenty. Adding another restaurant would compete for the same diner pool. Instead, offer services the street lacks: massage, beauty, tutoring, professional offices, short-stay accommodation. These complement the existing restaurants rather than competing with them.
Building stack — recommended configuration
L5 Boutique rooftop
8 premium short-stay (Airbnb) · roof terrace
¥286k NOI
L4 Long-stay residence
8 monthly leases (workers + families)
¥153k NOI
L3 Front commercial + office
2 front shops (86 m² ea) + 16-desk office
¥542k NOI
L2 Front commercial + residential
2 front offices (45 + 36 m²) + 6 residential
¥435k NOI
L1 Shops + parking
2 front shops (55 + 39 m²) + 8 rear parking
¥180k NOI
10 commercial tenants · 14 residential units · 16 office desks · 8 parking spaces · 2 stairs + elevator
L1 — shops + parking (kent7)
- South (front)
- Shop A (55 m², milk tea / bakery) + Shop B (39 m², phone repair / convenience)
- North (rear)
- 8 covered parking spaces via 3 roll-up doors from back street
- Access
- SE pedestrian entrance → 1.5 m corridor → E stair · W person door → W stair
- Fit-out
- ¥283,000
- NOI
- ¥180,000/yr
L2 — front offices + residential (kent8)
- S2 (SW, 45 m²)
- Massage / spa — 2 treatment rooms + reception + shower
- S4 (SE, 36 m²)
- Beauty salon, nail bar, or small clinic
- 6 residential
- 2 Airbnb corners (N1, N3) + 4 monthly leases (N2, N4, S1, S3)
- Fit-out
- ¥1,920,000
- NOI
- ¥434,700/yr
L3 — front shops + office (kent9)
- Unit A (SW, 86 m²)
- Dance / yoga studio, training center, or co-working
- Unit B (SE, 86 m²)
- Design office, photo studio, or TCM clinic
- North half
- 16-desk office — single employer or 2–3 sub-tenants
- Fit-out
- ¥850,000
- NOI
- ¥541,800/yr
No restaurant on L3 — the street already has many. Offer services the area lacks instead.
L4 + L5 — residential (kent5)
- L4 (8 units)
- All monthly leases — workers, families. Boring but reliable ¥153k NOI
- L5 (8 units)
- Boutique Airbnb — premium fit-out, roof terrace, reception lobby. ¥286k NOI
- Combined fit-out
- ¥4,150,000
- Combined NOI
- ¥439,000/yr
L4 is the defensive floor — pays building baseline even if everything else underperforms. L5 is the upside play — highest ADR in the building.
Master pro forma
| Floor | Use | Fit-out (¥) | Gross/yr (¥) | NOI/yr (¥) | Cap rate |
|---|---|---|---|---|---|
| L1 | 2 shops + 8 parking | 283,000 | 200,000 | 180,000 | 63.6% |
| L2 | 2 commercial + 6 residential | 1,920,000 | 514,900 | 434,700 | 22.6% |
| L3 | 2 commercial + 16-desk office | 850,000 | 614,400 | 541,800 | 63.7% |
| L4 | 8 long-stay residential | 1,750,000 | 180,000 | 153,000 | 8.7% |
| L5 | 8 boutique short-stay + terrace | 2,400,000 | 440,000 | 286,000 | 11.9% |
| TOTAL | ¥7,203,000 | ¥1,949,300 | ¥1,595,500 | 22.1% |
| Headline metric | Value |
|---|---|
| Total fit-out investment | ¥7.20M ≈ US $1.00M |
| Annual gross revenue | ¥1.95M ≈ US $271k |
| Annual NOI | ¥1,595,500 ≈ US $222k |
| Building cap rate | 22.1% |
| Simple payback | 4.5 years |
| 10-yr cumulative NOI (3% growth) | ¥18.3M ≈ US $2.5M |
| NOI per m² (2,250 m² gross) | ¥709/m²/yr |
| Commercial tenants | 10 (across L1–L3 south face) |
| Residential units | 14 (L2: 6, L4: 8) + 8 short-stay on L5 |
| Office desks | 16 (L3 north half) |
| Covered parking | 8 spaces (rear entry via north roll-ups) |
vs. kent5 baseline — what changed
| Kent5 (baseline) | Kent11 (recommended) | Delta | |
|---|---|---|---|
| L1 | 3 large commercial bays | 2 small front shops + rear parking | Parking added, shops more leasable |
| L2 | 8 residential | 2 front commercial + 6 residential | +¥245k NOI |
| L3 | 32-desk full office | 2 front commercial + 16-desk office | +¥410k NOI |
| L4 | 8 long-stay | 8 long-stay (unchanged) | — |
| L5 | 8 boutique | 8 boutique (unchanged) | — |
| Total fit-out | ¥8,533,000 | ¥7,203,000 | −¥1,330,000 saved |
| Total NOI | ¥990,000 | ¥1,595,500 | +¥605,500 (+61%) |
| Cap rate | 11.6% | 22.1% | +10.5 pts |
| Payback | 8.6 yr | 4.5 yr | −4.1 yr faster |
The insight: converting the south-facing front of L1–L3 to small commercial while keeping rear/upper floors as office + residential yields 61% more NOI for ¥1.3M less capex. Small-format commercial (35–86 m²) commands dramatically higher rent-per-m² than either large bays or residential studios.
Circulation — all floors
- SE entrance
- Glass pedestrian door at front-right (south-east) → 1.5 m corridor along east wall (L1) → E stair
- W person door
- Industrial door at middle-left of west wall (L1) → W stair
- E stair (primary)
- L1 → L2 → L3 → L4 → L5 → roof. Serves SE corridor + east-side commercial units on every floor
- W stair (secondary)
- L1 → L2 → L3 → L4 → L5 → roof. Serves W door + west-side units on every floor
- Freight elevator
- Center of core band. All floors. Door faces west onto the spine corridor (L2+) or core link (L1)
- E-W core link
- Corridor through the core band connecting W stair ↔ elevator ↔ E stair on every floor
- N-S spine (L2–L5)
- 1.5 m corridor running full 30 m north–south, west of elevator. All unit doors open onto it
- Rear roll-ups (L1)
- 3 doors on north wall — vehicle-only access to parking. Not for pedestrians
Fire safety — all floors
- Egress
- 2 independent stairs (W + E) on opposite sides of building — code-compliant dual exit from every floor
- Travel distance
- Max 25 m from any point to nearest stair (building is 30 m long, stairs at y=13–18 m = center)
- Sprinklers
- Full-building wet sprinkler system on all floors. Required for mixed-use > 300 m²/floor
- Fire alarm
- Addressable system with smoke detectors in every unit, corridor, and commercial space. Manual pull stations at each exit
- Extinguishers
- 4 per floor — at each stair landing + aisle/corridor intersections
- Emergency lighting
- Battery-backed LED on all corridors, stairs, and drive aisles. Photoluminescent exit signs
- Fire-rated partitions
- 2-hour rated between: commercial ↔ residential, commercial ↔ parking, each floor at core band where uses change
- Kitchen exhaust
- Not applicable — no restaurant in building. L1 shops are cold-prep only (milk tea, convenience). No grease trap needed
- Standpipes
- Dry risers in W and E stair shafts. FD connection at L1 west door
NOI diversification — income by type
| Income type | Floors | NOI/yr | % of total | Risk profile |
|---|---|---|---|---|
| Small commercial (10 tenants) | L1, L2, L3 south | ¥948,000 | 59% | Diversified across 10 tenants — losing 1 = only 6–14% income hit |
| Long-stay residential (12 units) | L2 mid/north, L4 | ¥229,500 | 14% | Lowest risk — stable monthly leases, 95% occupancy |
| Short-stay / Airbnb (10 units) | L2 corners, L5 | ¥125,000 | 8% | Highest risk — seasonal, regulation-exposed (民宿 licensing) |
| Office (16 desks) | L3 north | ¥89,800 | 6% | Moderate — cyclical but long-lease |
| Parking (8 spaces) | L1 north | — | — | Amenity value — lifts upper-floor rents, not charged separately |
Stress test: if all Airbnb is banned tomorrow (worst case), NOI drops to ~¥1,470k (−8%). The building remains highly profitable because 92% of income comes from commercial leases, monthly residential, and office — all on contracts.
South facade — the 3-floor retail stack
The south face of the building becomes a vertical services center — 10 commercial tenants across 3 floors, all with south-facing windows visible from the street. The west stair and east stair each serve as a vertical retail corridor.
| Floor | West stair side | East stair side |
|---|---|---|
| L3 | Dance / yoga / training (86 m²) | Design office / photo studio (86 m²) |
| L2 | Massage / spa (45 m²) | Beauty salon / clinic (36 m²) |
| L1 | Milk tea / bakery (55 m²) | Phone repair / convenience (39 m²) |
Customers entering for milk tea on L1 see the L2 massage sign on the stairwell. Parents dropping kids at the kindergarten nearby stop for a coffee, notice the L3 tutoring center. The tenants feed each other. Near 沙溪镇中心幼儿园, the parent demographic is perfect for tutoring, beauty, and quick-service food.
Why this mix works for 沙溪镇
- Street already has restaurants — don't add another. Offer services the restaurants' customers also need: massage after dinner, beauty appointment, phone repair while eating. Complement, don't compete
- Near kindergarten — parents walk past twice daily. L1 milk tea + L3 tutoring center are natural fits. After-school tutoring (培训) in Guangdong is a ¥10+/m²/day tenant
- Industrial workers nearby — the L4 monthly apartments (¥1,600–2,200/mo) target factory engineers and office workers who want to live close to work. The L1 convenience shop + L1 barber/phone repair serve their daily needs
- Weekend visitors — Shaxi is developing as a cultural tourism destination. L5 boutique Airbnb + L2 Airbnb corners capture weekend/holiday stays at ¥180–380/night. Roof terrace is a marketing differentiator on listing platforms
- Covered parking is rare — most industrial-zone buildings have zero. 8 covered spaces (included free with L3 office and L5 boutique stays) is a genuine competitive advantage
Phased build sequence
| Phase | Floors | Capital (¥) | Cumulative (¥) | NOI added | Cumulative cap |
|---|---|---|---|---|---|
| 1 (month 0–3) | L1 + L2 | 2,203,000 | 2,203,000 | ¥614,700 | 27.9% |
| 2 (month 4–6) | L4 | 1,750,000 | 3,953,000 | +¥153,000 | 19.4% |
| 3 (month 7–10) | L3 | 850,000 | 4,803,000 | +¥541,800 | 27.3% |
| 4 (month 11–15) | L5 + roof terrace | 2,400,000 | 7,203,000 | +¥286,000 | 22.1% |
Phase 1 is self-funding. L1 + L2 together produce ¥615k NOI on ¥2.2M capex (27.9% cap). By the time Phase 2 starts, Phase 1 rents are already flowing in. The building begins generating income from month 3, not month 15.
Open questions & next steps
- Verify zoning: confirm with 沙溪镇 工商局 that mixed commercial + residential is permitted on all floors. Industrial mixed-use zones in Guangdong usually allow this, but get it in writing
- 民宿 licensing: check with 公安 / 城管 whether Airbnb (民宿) is permitted in this zone. If not, convert L5 to monthly — NOI drops ~¥80k but the building is still highly profitable
- Elevator access: can the existing freight elevator be reprogrammed for L2 + L3 commercial stops? Would help massage/spa customers and office workers
- Signage permits: will the 城管 allow lit signage on the south facade across 3 floors? Industrial zones are usually permissive, but verify
- Structural check: confirm floor live loads can handle commercial use (higher occupancy than residential). Industrial shells are usually over-built — likely fine
- Utility capacity: 10 commercial tenants + 22 residential units + office = ~200 kVA. Verify the incoming electrical feed and water main can handle it
- Market validation: walk the street. Count second-floor commercial tenants in nearby buildings. If massage/beauty shops already exist on L2 of neighbors, the demand is proven
All design studies
| Study | Scope | Status in kent11 |
|---|---|---|
| Kent | L2 original 6-unit HUD | Superseded by kent2/kent8 |
| Kent2 | L2 8-unit residential | Base for kent8 (6 of 8 units retained) |
| Kent3 | Unit interiors | Still valid for L2/L4/L5 unit layouts |
| Kent4 | L1 commercial + L3 office | Superseded by kent7 (L1) + kent9 (L3) |
| Kent5 | Full building baseline | L4 + L5 retained; L1–L3 improved |
| Kent6 | L1 full parking | Alternative: max parking, zero L1 revenue |
| Kent7 | L1 shops + parking | Used — L1 in kent11 |
| Kent8 | L2 front offices | Used — L2 in kent11 |
| Kent9 | L3 front shops + office | Used — L3 in kent11 |
| Kent11 | Full building summary | This page |