Real Estate Enter The Era Of Specialization And Subdivision

Under the trend of industry segmentation, with the development of the real estate industry, the agent construction business which has been growing for ten years has been facing a bottleneck period. Although the leading enterprises in the agent construction industry have been born, more rising stars are on the way.

In fact, since the housing reform in 1998, China's agent construction industry has experienced more than 20 years of development and evolution. In addition to the traditional construction companies, the "asset light mode" operation of agent construction has long attracted many real estate enterprises to join. According to incomplete statistics, there are about 30 domestic real estate enterprises participating in agent construction business, and the market competition is becoming increasingly fierce.

When it comes to agent construction, the first thing people in the industry think of is green city China (03900. HK, referred to as "green city") and song Weiping. In 2010, song Weiping put forward the idea of "three carriages" of real estate agent construction, independent investment income and park service income. Now, although song Weiping has completely withdrawn from the management of green city, the three business systems of green city system established by him have gradually become full-fledged. The agent construction business platform green city management (09979. HK) and green city service (02869. HK) have been completed Listing.

In 2014, song Weiping could not continue to use the brand of green city in agent construction business after selling part of his equity. So he founded blue city, which is also a company with agent construction business.

On August 28, the scale of the agent construction industry chain has reached the first place. The green city management, known as "the first stock of agent construction", released its first half year report after listing. Two important indicators of the company declined significantly. The company's revenue was 815 million yuan, down 21.3% year-on-year; the owner's share of profit was 134 million yuan, down 14.28% year-on-year.

Li Jun, CEO of green city management, said that due to the impact of the epidemic, the construction and sales nodes of revenue agent construction projects were delayed by one to two months, so the revenue, gross profit and net profit of the current period had a year-on-year correction.

During the reporting period, the number of management projects increased from 245 projects in the same period of last year to 268 projects, of which 155 were commercial construction projects, accounting for 57.8%; 113 were government construction projects, accounting for 42.2%. Li Jun believes that this volume can maintain the growth of 2-3 years.

Li Jun believes that green city management has the opportunity to achieve compound growth, because the number and quality of new projects have been improved. In the same period of last year, the total construction area of the green city increased by 3.837 million square meters, an increase of 3.836 million square meters over the same period of last year.

However, despite their concern about green city management, some investors could not understand the agent construction industry. At the performance meeting on that day, many questions were raised to the management, including how green city management interacted with green city service in business, and why the stock price was not as good as that of Green City Service.

In the past two months of listing, the highest share price of Greentown management has reached HK $10, and is currently maintained at more than HK $3. The senior management of Greentown admitted that the capital market has doubts about the future growth of Greentown management's profit mode, and the stock price fluctuation is related to the fluctuation of the market.

Agent construction is not only a new blue ocean of professional segmentation, but also a service category facing upgrading. Industry insiders believe that this is a link in the division of labor between the upstream and downstream of the traditional real estate industry, which is actually the result of a resource integration demand of developers.

At present, green city management has become a leading real estate enterprise in the industry, but the "old green city" and the blue and green double city founded by Cao Zhounan, the former CEO of green city China, have gradually expanded their business scope.

Ten years of agency construction

In 2009, after the scale rushed up, many leading real estate enterprises, leading manufacturing enterprises and other enterprises took a lot of land. With the advent of regulation and control in 2010, green city China saw the opportunity to create a brand output management model for the stock of land, which was aimed at the stock land.

After ten years, the number of agent construction projects has decreased sharply. Now most of the leading enterprises take land in the market. Even the top enterprises are difficult to get land, and the competition is fierce. If there is no team and brand, it is very difficult for small companies to take land. From the perspective of development, the pure agent construction business model is facing a bottleneck.

It is revealed that green city management has signed more than 73 million square meters of projects in total. In fact, 38.82 million square meters of construction have been started, which means that nearly 30 million square meters need to be started in the next stage. According to the 4-5-year cycle of agent construction projects, the reserves of these projects are enough for green city management to achieve a compound growth of 20% in the next 4-5 years.

The orientation of green city management is a construction agent company, which provides a service management company for commercial construction, government construction and other services. Ding Zuyu, CEO of E-House enterprise group, believes that China's real estate has gone through three stages, including land dividend era, capital dividend era and management dividend era. At present, China's real estate has entered the era of management dividend, and green city management is a company driven by management.

In fact, the asset light model is counter cyclical. When the market is good, all developers and even small and medium-sized developers feel that they can build houses. After all, the houses will be sold out. When the market is poor, they need professional teams to do it. Especially when the financial situation is getting worse, such enterprises may need agents like green city to make matchmaking suits To provide intermediate credit service.

Li Jun pointed out that there are more than 70000 real estate developers on the market, and there are many brands in small and medium-sized enterprises that are not enough to compete with large enterprises.

Compared with the bottleneck period, perhaps Li Jun prefers to say that green city management is preparing for transformation. Different from green city management, the biggest problem of blue and green cities at present may lie in project development and business model. However, Cao Zhounan already has a set of logic. He believes that there will be two major trends in the real estate industry in the future. One is that the industry concentration will be higher and higher, and there will be oligarchs in the real estate industry. The other trend is that investment and development will be separated. The industry is more and more professional, and the professional things will be left to professional people. Those who have money will do the investment as project landing service providers or suppliers We must solve the problem of investors' investment safety. Therefore, Cao Zhounan believes that it is necessary to set up financial guarantee and gambling for construction projects.

Therefore, Cao Zhounan pointed out that the bottleneck period of pure agent construction has appeared. First, after 10 years of digestion, there are not so many projects. Second, for the investors, the pure agent construction risks are borne by themselves, and the agent construction party "does well and does bad all the same". Why all the risks are on the investor, and the agent construction party can guarantee the income through drought and flood? From the investor's point of view, the investment risk is zero, and theoretically the investment return is zero, which is not in line with the investment logic. "There are still many people interested in land investment. As long as there is an increase, there will be opportunities for the agent construction industry."

Transformation and development

In fact, facing the possible contraction of pure agent construction business, the management of green city management is thinking about the transformation.

For Li Jun, under such an epidemic situation, the number of government agent construction is also increasing. But now, with the urban renewal and the transformation of old residential areas, this business channel has the opportunity to expand.

Small and medium-sized enterprises, for example, have the possibility of getting through the difficulties of small and medium-sized enterprises in financing projects. But if some industries have defects, they will not take the initiative. In the first half of the year, green city management rapidly expanded the government business sector, and the commercial sector was doing strategic customers and important big customers. At present, it can ensure the stable growth of 2-3 years.

2-3 years later, where will the growth momentum of green city management come from? Li Jun pointed out that he took the initiative to turn to the cooperation between state-owned enterprises and financial institutions. "As a service industry, we can adjust at any time. We have no investment pressure." Li Jun also made it clear that he would not acquire projects, and the company could only maintain the uniqueness of its business model in the capital market. At present, green city management has no plan to make a difference in investment.

When it comes to financial business, Li Jun is full of interest. He disclosed that some time ago he went to Shandong company for investigation, and also mentioned the possibility of paying attention to the entrusted business of financial enterprises. "In the past, we focused on small and medium-sized developers, now on state-owned enterprises, and in the future, we focused on financial institutions."

Similar to Cao Zhounan's point of view, Li Jun also believes that the division of labor in real estate will be refined, and investors will hand over their real estate to contractors. Such roles have emerged in China, such as ping an real estate and BYD factory, which have many real estate projects, but they will not develop their own.

To be sure, with these 70000 developers gradually increasing their concentration, the new force that can help them in the next 10 years is financial institutions. In addition, the non-performing asset management companies in the four major banks can also become the partners of agent construction. They build projects on behalf of financial institutions through a new mode.

Li Jun further gave an example, for example, when a company bought a land, but the operating money was not enough, the financial institutions would look for agent construction companies to do it because they did not believe in their development and management ability, believing that this would protect the creditor's rights. At this time, agency construction was a condition attached to the loan of land by financial institutions.

"From a dynamic and developmental point of view, I think although the competition in this process will be very fierce, there is a channel and prospect for our business, I think it is very broad." Li Jun told investors.

After two years of practice, the blue and green cities have found their own way of Agent Construction -- co construction. Cao Zhounan pointed out that the fundamental difference between "co construction" and "agent construction" is that the co construction should be mutually beneficial and mutually beneficial. Professional people should do professional things, and the entrusting party and the agent (both can be called "co construction parties") should give full play to their professional advantages. In addition, each co construction party must bear corresponding responsibilities.

After two years of practice, the co construction of this business model can go on. Cao Zhounan thinks that it can be described as "thriving".

For the enterprises still in the ups and downs of the agent construction industry, after the introduction of the "three red lines", some small and medium-sized real estate enterprises have realized that they can also play the role of agent construction if they have the ability of marketing, industrial integration and operation. Cao Zhounan pointed out that this is also the direction of China's real estate in the future.

In fact, Europe and the United States have already gone through this stage. Iron Lion Gate is a typical example. "Vertical integration + small stocks trading" mode of heavy operation and light assets. The former makes tieshimen expand the depth of the industrial chain, while the latter maximizes the efficiency of the use of funds. At the same time, with the help of the iron chain, it has the ability to obtain the full range of real estate funds.

However, due to the background of the central enterprise, the green city management has no co construction party in mechanism, which is the attribute of state-owned enterprises and central enterprises. No matter how the development of agent construction real estate mode is at present, almost all the management levels have reached a consensus that after the refinement of the industry, people and team are the foundation of the agent construction industry.

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