Hidden And Worry Brought About By The Rapid Expansion Of The "Cracked" Eggshell

A sudden outbreak has made this fragile long rental apartment industry worse.

Over the past few days, long rental apartments and eggshells have been double complained by landlords and tenants in many cities. The eggshell at the top of the storm has been accused of refusing to pay the rent of the landlord.

In February 20th, the eggshell proposed a compromise plan, hoping to postpone paying the rent to the landlord during the epidemic. At present, the parties are still in the process of communication and consultation.

Unable to pay the landlord rent on time, it is not difficult to see that the shell has been facing the risk of capital chain. The reason is that the housing market has been frozen by the epidemic, and the long rental apartments have become more and more empty. Even the capital companies, such as eggshells, free capital, listed companies or listed companies, are hard to bear the pressure of cash flow.

Behind this vacant crisis, what should be reconsidered is the "original sin" of the scattered long rental apartments such as eggshells. Two the landlord and the rent loan mode are exposed to risks in the past few years after capital bubbles and horse racing.

In the future, how to balance the interests between landlords, operators and tenants, and make the operation of the organization generate sustained profits, is the pain point that the long rental apartment industry needs to solve.

Vacant cash flow pressure

Xiao Yu (alias) is hard to believe that the eggshell that has just been listed and raised in January 17th will not have the money to give the landlord.

Light rain is an ordinary landlord of eggshell in Beijing. In 2018, he rented his house to the eggshell, signed 5 years, the monthly rent was around 6000 yuan, and deducted the monthly rent free, as well as property fees and heating costs, and he got the monthly income of about 5500 yuan.

In February of 2020, Xiao Yu did not receive the rent on time. Subsequently, he received a phone call from the eggshell, asking for rent free for one month, on the grounds that the force majeure caused by the epidemic.

Xiao Yu found that Beijing, Shenzhen, Chengdu, Wuhan and other places had landlords like themselves, and some landlords were asked to cancel the contract after they refused to accept rent free.

According to an internal data from the eggshell, 70 thousand landlords with similar rain were found, but the eggshell did not respond.

In fact, this quantity may be more. According to the prospectus listed on eggshell, there are more than 400 thousand long rental apartments operated by eggshells. Because it is a decentralized community model, it means that landlords are also in the hundreds of thousands.

Apart from whether the epidemic is a force majeure, behind the demand for so many landlords to rent out, the eggshell is experiencing the cash flow crisis brought about by vacant housing.

In February 18th, eggshell admitted in the official micro "to the landlord's sincere words" that after the Spring Festival, it should be the peak season for the long rental apartment industry. But with the development of the epidemic this year, the peak season is gone.

"People everywhere can not return to the city because of the epidemic situation, and many areas in the 13 cities of the eggshell are subjected to very strict control and do not allow free access and can not normally carry out the rental business. The new potential tenants are also not allowed to enter or leave, resulting in the original vacant house being rented out." Eggshell revealed that from the beginning of the new year's Eve, the company sought consultation from every landlord for rent free period.

How high is the current vacancy in eggshell? According to the prospectus and third party data, the occupancy rate of the shell as at the end of June last year was 89%, which means at least 11% vacancy rate.

According to the analysis of a leasing industry, generally speaking, before and after the Spring Festival is a node for tenants to rent or rent, and the peak of new rent comes after the Spring Festival. This process is interrupted by the outbreak this year, and the vacancy rate of eggshell is expected to be at least 20%.

According to the average rent of an average shell of about 2200 yuan per house, 20% of the vacancy mean a rental loss of about 200 million yuan a month.

In this regard, the eggshell related person told the economic report twenty-first Century that vacancy rates and rent withdrawal and rent replacement have not been specifically counted, and that the refund of rent is indeed more than in previous years, and there is indeed a vacancy in some houses.

He also did not deny whether the cash flow pressure had occurred in the epidemic.

According to the current epidemic situation, many cities are still in the stage of strict prevention and control. Whether the rental market can be normal in March is unknown.

The industry estimates that a large number of vacant eggshells will be maintained for 3 months, that is, the loss of 600 million yuan -7 billion yuan.

This means that when there is no vacant tenant, the eggshell will still be paid to the landlord rent on time, plus the maintenance cost of many housing sources, which will undoubtedly enlarge its pressure. The higher the vacancy rate, the greater the pressure.

According to the prospectus, the cost of the rent paid to the landlord in the 1-9 months of 2019 was 61%, about 4 billion 450 million yuan, with an average monthly cost of 500 million yuan.

This adds pressure to the already tight financial situation of eggshells. By the end of September last year, the net cash flow generated by eggshell business activities was -16.29 billion yuan, an increase of 133.49% over the same period last year, with an asset liability ratio of 99.83%, up sharply from the same period last year.

High cost expansion sequelae

Back in the summer of 2018, the embarrassment of eggshells today may have planted seeds.

Xiao Yu remembers that when the owner of Tiantongyuan issued a post in Beijing, he said the eggshell and the price of his house had been raised at the same time. At last, he had a psychological price of three yuan in the monthly rent of 7500 yuan, and was given an egg shell to 10800 yuan / month.

Subsequently, eggshell, free operators and other places in Beijing, Shenzhen and other places increased competition for housing, rents rose, that summer many college graduates nightmare.

As a decentralized long rental apartment operator, the eggshell is a typical two landlord mode. After collecting and distributing the scattered housing resources of individual owners in the community, the eggshell will be rented to the tenant, and the profits will mainly come from rents and service charges.

Under the birth of capital, the eggshell is not satisfied with the slow collection and renting of a family, but by the means of financing, rent and loan, it rapidly and radically expands, and the number of cities and houses surged.

From 2015 to September 30, 2019, 5 years ago, eggshells have entered the 13 markets of Beijing, Shenzhen, Shanghai, Hangzhou, Tianjin and Wuhan. The number of operating houses has increased from more than 2000 to 430 thousand, increasing by 160 times.

Public information shows that over the past 5 years, eggshell has gone through 7 rounds of financing, with a total limit of more than 700 million dollars, which does not include the $149 million of listed financing in January.

According to the prospectus, in 2017, 2018 and the first nine months of 2019, the percentage of tenants who used "rent loans" was 91.3%, 75.8% and 65.7% respectively. Accordingly, rent advance payments from financial institutions were 937 million 600 thousand yuan, 2 billion 127 million yuan and 3 billion 105 million 700 thousand yuan respectively. In addition, there were 106 million yuan, 280 million yuan and 794 million yuan of prepaid rent for tenants.

Financial reports show that financing and rental income have failed to cover operational costs, and eggshells have been losing money for years.

In 2019 1-9, eggshell business income of 5 billion yuan, up 198.8% over the same period last year, operating costs increased from 2 billion 385 million yuan in the same period in 2018 to 7 billion 313 million yuan, up 206.6% over the same period last year, the growth rate was higher than that of operating income, of which more than 60% of the cost came from rental costs, that is, the cost of giving landlords and housing sources.

At the same time, the company's net loss increased from 813 million yuan to 2 billion 516 million yuan, an increase of 209.5% over the same period last year, which is also higher than the growth of operating income.

In the eyes of a long rental apartment practitioner, the bitter pill of high cost housing before eggshell is swallowing. According to a number of landlords revealed that the current egg shell requirements of the housing supply, are basically vacant high rental housing.

Ding Zuyu, CEO of Yi Ju enterprise group, believes that long rental apartment operators can negotiate with the landlord to avoid rent, so as to ease the pressure of cash flow.

In February 20th, the information on eggshell's external release said that the landlord who explicitly expressed his support for the rent free period would return the rent directly at the end of the contract period. For the landlord who has not yet made a clear statement, he offered three rent extension return schemes.

Eggshell people also said that the company has responded to the epidemic plan, and then the tenants in Wuhan will continue to be free of rent.

Xiao Yu said he was willing to support rent free for one month, and the rent was delayed. His house is full of tenants at present and has not been asked to cancel the contract.

However, for more eggshell landlords, this is a vague explanation. It only provides the rent free and delayed payment scheme of the non canceling landlord, and still fails to answer the queries of the landlord who is asked to release the contract. As of press release, eggshells did not respond to reporters' related matters.

In addition to the dispute with the landlord, the eggshell needs to face the problem of rent clearing. According to the opinions of the six sector on rectifying and standardizing the order of the housing rental market at the end of last year, the rental income of housing rental enterprises should not exceed 30% of the amount of housing rent loans, and the ratio should be adjusted before the end of 2022.

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