Inch Of The Earth Must Be Fought: Hidden Rules And "Little Moves" In The Auction

Yan Yuejin said, "Consortium" or "collusion", to a certain extent, depends on the competition pattern. If the market is fully competitive, participants will form a consortium to take it; but if it is "monopolistic competition" or "oligopoly", the soil of "collusion" is easy to breed.

In June 11th, the Suzhou natural resources and Planning Bureau issued four announcements, revealing some "insider" of Suzhou's recent Earth auction: in the auction of April and May this year, housing companies registered a number of "vest" companies to participate in the auction so as to increase the hit rate.

As a result of violating the provisions of "a company that is directly controlled by the same natural person, legal person or other organization shall not participate in bidding for the same commercial or residential land", 8 enterprises involved have been listed in a broken list, and three years are forbidden to take land in Suzhou. Through equity penetration found that the company behind the punishment, including Jindi, agile housing and other well-known Housing enterprises.

The registered "vest" company's participation in the soil patting is also known as the "surround bid". Many housing companies told the economic news reporters in twenty-first Century that "bidding" is only one of many hidden rules in China's land auction.

In addition to the "surround", "collusion", "accompanying bid", and other hidden rules also exist widely. What's more, some participants interfere with their opponents through the "small action" on the sidelines. For example, on the way to the site of the dirt shoot, the opponent made a small traffic accident.

In recent years, land leasing rules have been continuously improved and loopholes have been reduced. However, the huge interests involved in land transactions still make these chaos repeated. The maintenance of rules is becoming a "cat and mouse game".

Land has always been one of the most important resources of Housing enterprises. - Gan Jun photo

Competition and cooperation

In May 22, 2017, Jiaxing, Zhejiang launched 8 land, as many as 750 enterprises came to auction. After 7 hours of auction, the 8 lands were competing. According to media estimates, there are 425 "vest" companies in the auction companies. Among them, only 10 of the "vest" company reached 84.

The reason is that enterprises see the "price ceiling + Yaohao" bidding rules loopholes. By signing the "vest" company to carry out the bidding, it can increase the probability of winning the lottery.

In the second half of last year, a land auction in northern Longhu, Zhengzhou, attracted more than 40 bidders. Some participants roughly estimated that the number of "vest" companies under one head housing company was over ten. According to the margin of 200 million yuan per company, the dozen "vest" companies need to pay about 2000000000 of the security deposit. "Large enterprises, small companies generally can not get out." A local housing company official in Henan said to the twenty-first Century economic news reporter.

He said that this makes the advantages of large housing companies in the market of the earth auction more obvious. "In the past two years, the large scale housing enterprises in China have accelerated to enter the Henan market." bidding "is an important way for them to occupy the market.

"Bidding" reflects the fierce competition in the market, but when the parties move from competition to cooperation, another hidden rule emerges.

In March 31st this year, a real estate company at the base price of 3 billion 430 million yuan will be the Shanghai Hongkou District HK271-01 plot income bag, the floor price of 63155 yuan / square meter has created the Shanghai homestead high. At the same time, there were two other companies involved in bidding, but neither of them had put up any cards.

While the industry was surprised by the fact that the plot was sold at zero premium, there were rumors in the bookstore that three companies took the plot in the form of "collusion" and then jointly developed it.

"Collusion" is another form of "surround bid". The difference is that the participants of "collusion" are usually the interest community composed of many enterprises. Among them, there is only one truly interested buyer, and the rest of the participants are only responsible for "accompany".

As another common hidden rule, "collusion" often appears in the centralized transfer of many lands. Participants can take different land plots without prior legal or written agreements, and do not have to bear the cost of rising due to fierce auction.

In the case of a large housing company in Beijing, "collusion" is a kind of anti market behavior based on "monopoly + tacit understanding". It has a certain exclusiveness, although it can reduce costs, but the risks faced by participants are still great. He told the twenty-first Century economic news reporter that many years ago, the company had "conceded" a land through "collusion", but in the latter bid, the other party suddenly raised the price, and he almost missed.

With the strictness of rules and the perfection of supervision mechanism, the phenomenon of "surround bid" and "collusion" has declined in recent years. Due to the controversy, the auction of Hongkou block in Shanghai was finally declared invalid. In early April, the top three executives who participated in the bidding were taken away for investigation. In June, the Hongkou District HK271-01 block was suspended.

Market rules PK rules and regulations

In July 8, 2016, related personnel from Minmetals and Wanke consortium went to Xianghe County Land Bureau of Hebei province to participate in the auction of several land. On the way, the bidders' vehicles were intercepted by a group of unidentified persons. The car was smashed, and the bidders were beaten and sent to hospital.

Although the parties have not responded, all sorts of clues have led the assailant behind the scenes to a local enterprise. For a long time, the enterprise monopolized the land level development of Xianghe county. Enterprises participating in the development of land at the first level enjoy greater priority and voice in the two tier land market, which is unwritten in the industry.

In fact, many enterprises still believe in the former in the face of the hidden rules of industry and the explicit rules of the market. In recent years, because of the fierce competition, more and more enterprises try to grasp the initiative by intervening in the primary development of land.

A person in charge of a housing company in Xi'an said to the twenty-first Century economic report that the company had been engaged in the first level development of a new plot in Qujiang New District, and finally got the land successfully. He said he would not pay attention to the "owner" plots, because this is the "industry rules", "you grab other people's land, the cost of each other is enhanced, and their credibility will also be affected."

There are, of course, exceptions. In the second half of 2019, in a land auction in Xuzhou, Jiangsu, a housing company participating in the development of the first class was at stake. But halfway out of a ten strong housing company, "no mercy", and after a continuous increase in the price of a strong win.

The practice of "unauthorized licensing" made the company unprepared. After many mediations, the company finally acquired a nearby plot as a "compensation".

Is there any reason for the "one or two level linkage" hidden rules?

Yan Yuejin, director of the think tank center of Shanghai Yi Ju Real Estate Research Institute, told the twenty-first Century economic report that the first level development of land and the two level transfer should be two independent links. Due to practical reasons, it is not easy to complete separation in a short time in many cities. However, it can still be coordinated through certain ways, such as transferring land by bidding, avoiding the intervention of capital strength and ensuring fairness, and at the same time, to a certain extent, it protects the enthusiasm of the first level developers.

The "death" of hidden rules

Land has always been one of the most important resources in the hands of housing companies, but as the first level developers have been losing their hands, some potential rules in land transactions seem to be failing in recent years.

"The competition is too intense." The former Beijing Housing Authority official said, "when more than a dozen companies want a piece of land, they will not be so modest."

In the case of Xuzhou, people familiar with the matter told the twenty-first Century economic report that the top ten housing companies ignored the "rules" and seized the ground because the regional companies had to make their achievements up to "death orders". In addition to Xuzhou, the company also took the same way in other cities of Jiangsu province.

"Take a good place, not only to complete the sales and refund tasks, but also to pry up a region if done well." The housing companies said that good plots often correspond to benchmarking projects. A benchmarking project usually helps Housing enterprises expand and deepen in the whole region, which is also called "strategic significance".

Yan Yuejin said that with the development of urbanization in China, the land resources that can be developed in hot cities began to decrease. The increase in scarcity has led housing companies to try to use different ways, including ignoring hidden rules.

In addition, many cities are promoting the separation of the first level development and the two level transfer, making the land transaction system further transparent and marketable. As a result, the right to speak of land developers will be weakened, and the competitive environment of the two tier trading market will be more equitable.

However, the phenomenon of "collusion" and "collusion" still deserves attention. In recent years, the increase of land cost has prompted more and more housing enterprises to form a consortium. This way of forming a community of interests is exactly the same as the logic behind "collusion".

Yan Yuejin said, "Consortium" or "collusion", to a certain extent, depends on the competition pattern. If the market is fully competitive, participants will form a consortium to take it; but if it is "monopolistic competition" or "oligopoly", the soil of "collusion" is easy to breed. With the increase of industry concentration, the right to speak has become more and more concentrated in a few large enterprises in some cities and parts of the country.

However, the relevant systems are also improving. On the one hand, many cities have launched the reporting mechanism of "collusion" behavior without setting the deadline; on the other hand, the regulatory authorities have continuously strengthened the retrospective process of transactions and disposed of suspected "collusion" behavior. It is understood that in recent years, the number of land transactions which have been considered invalid as a result of suspicion of "surround the bid" and "collusion" is increasing.

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