Investment And Financing Of Real Estate Industry Slowed Down In The First Quarter

Despite the constraints of "three red lines", "five housing loans" and "centralized land supply", most of the real estate enterprises still recorded the "best in history" in the first quarter of 2021. On the one hand, due to the impact of the epidemic last year, the sales base of real estate enterprises is generally low. On the other hand, in the current "cash king" era, real estate enterprises to speed up shipment is also a factor of initiative.

When the real estate industry entered the era of slow growth, stable survival has become the consensus of the industry. High leverage can no longer exist. What real estate enterprises can do is to "live within the limits of their income". At the investment side, they should be fast, stable and precise, and the sales side should grasp the pace of selling and improve the ability of products. At the financing end, they should study and judge carefully to improve the use efficiency of each sum of money.

All these are the skills that real estate enterprises need to cultivate at present. This industry, which used to rely on land dividends and financial dividends, has come to reshape itself. And this influence is also gradually reflected in the financial statements of real estate enterprises, from which we can see that the leverage ratio of real estate enterprises is gradually declining, the land investment tends to be cautious, and the financing scale has a greater turn.

The financing scale of real estate enterprises declined significantly in the first quarter of this year. According to the statistics of Shell Research Institute, in the first quarter of 2021, the total amount of domestic and foreign bond financing of real estate enterprises was about 304 billion yuan, a year-on-year decrease of 23%, which was the lowest issuance scale in the first quarter since 2018. In particular, the scale of foreign debt issuance declined significantly, 43.5% lower than that in the first quarter of 2020.

Under multiple tight hoop curse, real estate enterprises are no longer blindfolded. And the cost of galloping is beginning to show.

Prudent investment and financing

The results of financial constraints on real estate enterprises are reflected in the land market. According to the data of the central index Institute, although the land acquisition scale of top 100 real estate enterprises is still expanding, the growth rate has slowed down, and the concentration ratio is also decreasing.

According to the data of the China Academy of Sciences, from January to April 2021, the total amount of land acquired by top 100 enterprises was 821.4 billion yuan, and the scale of land acquisition was basically the same as that of last year. The top 100 threshold value was 2.2 billion yuan, slightly lower than the same period last year. The proportion of the total amount of land acquisition by bidding, auction and listing of top 100 enterprises accounted for 57.7% of the land transfer fees of 300 cities in China, and the proportion continued to decline.

According to the Central People's court, the total amount of land taken by 50 representative real estate enterprises in April 2021 decreased significantly compared with that of last year, which was mainly due to the "hot" land market in April 2020 and the frequent emergence of large amount of land, which increased the total scale. Although the land acquisition of representative enterprises decreased year on year this month, affected by the "two concentration" policy, the total amount of land acquisition in a single month was the highest in each month of this year.

The "two concentration" policy has indeed had a profound impact on the land acquisition pattern of the industry, which is a challenge to the capital allocation and resource allocation of real estate enterprises. In such intensive investment activities, most of the real estate enterprises have to give up, so that every cent is spent on the edge, or they are more likely to get nothing.

A person from a medium-sized real estate enterprise told the 21st century economic reporter, "it's too difficult, it's really difficult. We even had the poster ready. We thought it was safe, but there was no last one. We gave up Guangzhou tactically, so we concentrated on Chongqing. We didn't expect this result. "

In fact, it is not only small and medium-sized real estate enterprises that are left alone in "two centralized" land supply. Vanke, China shipping and China Resources did not even get much under such rules. For a piece of land in Guangzhou, a leading real estate enterprise has sent out dozens of waistcoats, and all the deposits have paid over 10 billion yuan, but it still fails in the end, which is not an example.

In last month's local auction in Guangzhou, which collected nearly 100 billion yuan, Zhonghai, which was satisfied with Guangzhou, finally failed to make any profit; China Resources, which has vowed to "warehouse in Guangzhou", has only one piece of land.

Corresponding to investment prudence, the financing scale of real estate enterprises also declined significantly in the first quarter of this year. According to the statistics of Shell Research Institute, in the first quarter of 2021, the total amount of domestic and foreign bond financing of real estate enterprises was about 304 billion yuan, a year-on-year decrease of 23%, which was the lowest issuance scale in the first quarter since 2018. In particular, the scale of foreign debt issuance declined significantly, 43.5% lower than that in the first quarter of 2020.

Zuo Yue, an analyst at Tongce Research Institute, believes that the decline in the scale of real estate financing is mainly due to the fact that the government continues to promote the reduction of leverage in the real estate industry, and the overall debt financing environment of real estate enterprises is relatively harsh“ The "three red lines" financing new regulation superimposes the "two red lines" housing loan concentration management policy, which limits the supply and demand of debt financing of real estate enterprises, and the financing environment can be said to be tightened across the whole line. In addition, the overall sales of major real estate enterprises in the first quarter were in good condition, which brought more sufficient cash flow to the real estate enterprises, so the initiative willingness of debt financing also decreased.

Benefit from management

In fact, from the overall point of view, the use of funds, the grasp of land, these actions can be attributed to the fine management of real estate enterprises.

Just as Yu Liang, chairman of the board of directors of Vanke, said that while the 19th National Congress of the Communist Party of China emphasized that "housing and housing do not stir fry", it also pointed out that China has entered a new stage of development, and economic development has shifted from high-speed growth to high-quality development. In this context, the real estate industry also needs to complete the transformation from scale speed to quality and benefit development. The introduction of "three red lines" and "double concentration" indicates that the industry has entered the era of management dividend.

"In the past, it was really easy to make money. As soon as I bought the land, the house price went up. Anyone can make money, so who can do it well? At the end of the day, the old model is not sustainable. Many are not just building a house, good location to make money, no products, marketing is also random money, too extensive. " An analyst who has been tracking real estate stocks for a long time told the 21st century economic report.

However, the current situation of real estate enterprises, whether they can adapt to the new changes, can achieve profit through refined operation, there is also an unknown.

From the statements of real estate enterprises, at least in the optimization of financial indicators, they have taken action.

Ping An Securities pointed out in a recent research report that by the end of 2020, the overall net debt ratio of listed real estate enterprises, the asset liability ratio after excluding advance collection, and the cash short debt ratio were 76.5%, 72.4% and 119.6%, respectively, 6.7%, 0.6% and 17.5% lower than that in 2019. According to the index of "three red lines", at present, the asset liability ratio of listed real estate enterprises only after excluding advance collection does not meet the requirements of "three red lines".

Leading real estate enterprises will make greater efforts to meet the financial indicators. For example, Vanke successfully transferred files in the first quarter of this year. According to the first quarter report of 2021, Vanke's net debt ratio is 15.5%, and the asset liability ratio excluding advance receipts is 69.5%. It holds monetary capital of 19.6 billion yuan, which is far higher than the total of short-term loans and interest bearing liabilities due within one year of 72.37 billion yuan.

Another example is Greenland holdings. According to the 2020 annual performance report, Greenland is a real estate enterprise with "three red lines". According to the latest information disclosed by Greenland, its cash short to debt ratio in the first quarter is greater than 1 and transferred to orange file.

However, if only in the financial side of the operation, this for the capital intensive industry, it is just the bottom line. As a middle-level manager of top5 real estate enterprises told the 21st century economic report, a good management of a real estate enterprise should be able to distinguish itself from the industry in terms of skills. For example, if you calculate that the same piece of land can be more than two points than others, the product planning can be favored by customers as soon as it comes out. Moreover, in terms of internal control of every detail, it is necessary to improve the management and control of real estate enterprises, To reduce the possibility of "being consumed" funds, "it is also necessary to build houses in the same area. In terms of land cost, construction and installation cost, there will be no big difference. The most important thing is how to make good use of money and make products brilliant." He said.

If measured in this way, many real estate enterprises, including the leading ones, still have a lot of room for improvement. Who can laugh to the end in the era of "management dividend", it is not the moment to win.

?