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CNAfter experiencing the booming supply and sales of the property market, the indicators of the Chinese property market reached a new peak in 2013. According to the 2014 China Top 500 Real Estate Development Enterprises Assessment and Research Report released by the China Real Estate Research Association and the China Real Estate Association, in 2013, the top 500 real estate development companies had reached a new high in terms of sales, sales area and other related indicators. The industry sources stated that With the market and traditional models approaching the ceiling, where is the new value-added model of real estate in the future, it has become the focus of real estate companies’ thinking and exploration.
Vanke and Evergrande ranked in the top two
Since the release of the first report in 2006, the Top 500 Housing Enterprises Report has gone through eight years, becoming a barometer reflecting the real estate market in China in the past year.
The report shows that in 2013, the sales area of commercial housing in China was 1.306 billion square meters, a year-on-year increase of 17.3%. The year-on-year increase in sales area quickly picked up, reaching the highest level since 2010; the national commercial housing sales amounted to 8.14 trillion yuan, a year-on-year increase of 26.3%. At the same time, the total sales floor area of commercial real estate of the top 500 real estate development enterprises reached 305 million square meters, an increase of 34.1% year-on-year, and the sales amount hit a new high of 3.26 trillion yuan, a year-on-year increase of 29.0%. Both growth rates were significantly ahead of the national level. Vanke and Evergrande ranked first two.
“The sales area is less than 600 million square meters in the year, reaching 1.3 billion square meters last year. The sales amount has reached 8 trillion yuan. The number of leading housing enterprises has exceeded 10 billion yuan, and some enterprises have started to reach 200 billion. The progress of the scale and the changes in the data reflect the maturity of China’s real estate.” The report writer and CEO of E-House China Ding Zuyi studied real estate development for nearly a decade. He can always feel the development of real estate from the data changes. For the performance of branded housing companies in 2013, Ding Zuyi used the online buzzword “Xidapu Ben” to describe it last year.
Increased concentration
In the overall rise of the real estate industry, the scale of brand enterprises is also expanding. The report shows that Vanke, Poly, and Greenland, which first achieved 100 billion yuan in sales last year, have maintained steady growth. Wanda, China Shipping, Country Garden, and Evergrande have successfully joined the “100 billion corps”.
However, while the number of members of the 100 billion-dollar housing company is increasing, the differentiation of housing enterprises is also proceeding. With the fluctuations in the real estate market and the fragmentation of markets in various regions, the continued improvement in industrial concentration in recent years has continued in 2013. The report shows that in 2013, the total sales value of the top 10 real estate development enterprises reached 1,078.98 billion yuan, accounting for 33% of the total 500 sales, which is a percentage increase from 2012; the total sales area is 107.192 million square meters, accounting for the top 500 total sales area. The 39% increase compared to 2012 was 3%. The top 50 and top 100 sales were 1964.241 billion yuan and 241.208 billion yuan respectively, which accounted for 60% and 73% of the 500 total sales, respectively.
Ding Zuyu said that real estate companies from 10 billion to 100 billion, using the traditional expansion model, after the 100 billion era, whether it is the industry or the traditional model, will encounter bottlenecks and ceilings, and therefore need a new mode of development. For example, Vanke proposed the direction of financial real estate, small-cap trading model, these models will be in line with mature models in developed countries, developers will become more purely developers.
Debt pressure rises
As a capital-intensive industry, risk management of real estate development companies has always been the key to business development. Since 2013, due to good sales, many development companies have chosen to increase leverage to accelerate growth. As a result, the debt repayment pressure of top 500 real estate development companies has generally increased, and the average net debt ratio has reached the highest point in the past five years.
The report shows that in terms of short-term debt repayment indicators, the average current ratio of the top 500 real estate development companies in 2013 was 208.57%, a decrease of 10.99 percentage points from 2012; the average cash-flow gearing ratio was -5.67%, and the 2012 average was 14.90. %. For the long-term debt repayment index, the average net debt ratio and asset-liability ratio of the top 500 real estate development companies in 2013 were 79.03% and 66.04%, respectively, representing an increase of 17.06% and 0.69% from 2012.
Zhu Zhongyi, vice president of the China Real Estate Association, said that both the top 500 real estate development companies’ profits and profitability have been related to the overall environment of the real estate development industry. However, due to the government’s continued concern over the increase in house prices, and the sharp rise in house prices is increasingly difficult to get the support of the demand side, simply relying on housing prices will increase the opportunity profits will be difficult to sustain. The gradual end of relying on rising prices to obtain profits gradually forced the company to rely on meticulous management in the future, through the construction of standardization, product line portfolio, improve marketing accuracy and other ways to reduce construction costs and sales management costs to improve profit margins.
Finding new profit points
Since the development of the real estate industry, the focus of competition among real estate development companies has not only focused on profit-oriented areas such as land, cost, and prices, but has also spread to areas such as product formats, follow-up services, and marketing strategies. In this context, the top 500 companies have become more competitive. Real estate development companies have increased their strategic initiatives in regional focus, products and services.
Analysts pointed out that the top ten enterprises with comprehensive strength have the characteristics of large scale, stable growth, good profitability, and high operational efficiency. In particular, Evergrande has made great achievements in the areas of corporate development strategy and operation management model. In 2013, it implemented the “112 plan” to promote its leap in sales of over 100 billion yuan in the regulatory year; it also passed Harvard University and Tsinghua University. Achieve strategic cooperation to achieve strategic upgrades. In addition, Evergrande has also achieved fruitful results in areas such as FMCG, business, hotels, sports, and culture. The company’s scale and brand influence have continued to increase, becoming the leading real estate company that can compete with Vanke.
Experts expect that real estate in the future will still play an important role in the national economic strategy of “steady growth and structural adjustment”. With the increase of industry concentration, leading enterprises with high regional diversification, clear growth strategies, and sound financial management will achieve better development. The development status of Wan Heng and Hutchison will greatly affect the overall competition situation of the industry.
Ding Zuyu said that 2013 is a high point of real estate development in the past decade or more. In 2014, it will usher in a turning point. Both real estate thinking and market capacity will change. There will be growth in the original scale, but it will gradually become the main theme.
Zhu Zhongyi stated that in 2013, in addition to strengthening cooperation with the financial industry, some key enterprises also paid attention to strengthening cooperation with e-commerce. In the future, the cooperation between the real estate industry and the information industry, financial industry, construction industry and other related industries is a major trend. This includes the importance of giving full play to the role of the procurement platform.
■Viewpoint
Yi Ju China Executive Director Ding Zuyi
Internet thinking will change the operating mode of housing enterprises
The core spirit of Internet thinking is openness and innovation. It has nothing to do with age. It is not a simple technology. The Internet pays attention to customers and their ongoing needs. So the ultimate goal of the Internet is to attract consumers to continue to use their platforms. ); And real estate thinking is relatively closed and traditional, real estate companies are more concerned about business operations and products themselves, the final goal is to attract consumers to buy a one-time property. The thinking mode of the real estate industry is determined by the characteristics of the real estate itself. It cannot be moved and the product is non-standard. A one-time transaction does not require repeat customers. Therefore, to some extent, real estate does not have any problems without Internet thinking, and it can also develop very well. At least, it has developed into China’s first pillar industry. However, for large-scale housing enterprises, it is possible to break away from the original stage of development and competition. Therefore, after Vanke learns the Internet, it is not the development of platforms and technologies, but the changes in systems and mechanisms.
Vice President of China Housing Society Zhu Zhongyi
Classified control to achieve accommodation
In 2013, the market was very different. The supply of first-tier cities and some second-tier cities is in short supply, and some third- and fourth-tier cities have large stock pressure. At the end of December, the total area of commercial housing sold nationwide was 492.95 million square meters, an increase of 46.59 million square meters compared to the end of September, of which the residential area for sale increased by 30.77 million square meters, and the area for commercial housing sales increased by 7.04 million square meters. In response to the market’s variability, the 2014 regulation embodies the idea of classification and control. According to the classification and control of different urban conditions, Beijing, Shanghai, Guangzhou, Shenzhen and other cities with fast-rising housing prices must implement differentiated housing credits, tax policies, and purchase restriction measures, increase housing land and small-to-medium-sized commercial housing, and provide housing for shared property rights. Speculative investment needs. In order to put pressure on housing stocks in cities with high pressure, attention should be paid to digesting stocks and controlling the scale of new development. Classification and regulation, two-way regulation and long-term mechanism construction will become the main tone of real estate policies this year, and expand the scope of networked cities. (Source Jinghua Times)
Platform micro-perspective
At present, major brands such as Mitsubishi, Otis, KONE, Hitachi and other brands in China are constantly increasing their efforts to cooperate with large real estate developers, and constantly consolidate their brand position in the industry. Even the Chinese national brand Kangli Elevator has formed strategic cooperation relationships with major domestic real estate developers such as Wanda Real Estate, Shiji Jinyuan Group, Country Garden, Oceanic Real Estate, China Shipping Real Estate, and Changfeng Real Estate. It seems that China’s elevator manufacturing companies want to accelerate the formation of their own brands, and cooperation with large real estate developers can be a shortcut on the road to brand building. The increase in the degree of concentration of real estate companies will further increase the scale of elevator manufacturing companies, and the market share will become more severe. This has also accelerated the shuffling of elevator manufacturers.