More Than Half Of The First Batch Of Centralized Land Supply Did Not Make Money? The Second Batch Of Releasing Profit Space And "Lottery"

At the end of August, Hangzhou government re issued the second batch of centralized land transfer announcement.

According to the announcement, the second batch of land is 31, about 2873 mu, with a total construction area of about 4.66 million square meters, and the total starting price is about 62.9 billion yuan. It is planned to transfer the land from October 12 to 13. In the same period of time, Chengdu and Nanjing also revised the rules for the second centralized land supply and land auction. The three cities have one thing in common, that is, the premium rate of land auction is set below 15%, and most plots in Chengdu are between 9% and 11%. After the premium rate reaches the peak, Nanjing will adopt the "lottery + pre-sale conditions" to increase the pre-sale conditions of commercial residential buildings to 50% of the completed residential investment.

In fact, according to the regulations of the Ministry of natural resources, when the premium rate of the plot reaches the upper limit, the bidders can be determined in three ways, and Nanjing and Hangzhou choose Offline lottery. In addition, the three cities have different degrees of strict control in the aspects of cooperative development and bidding qualification, but Hangzhou has slightly lowered the starting bid price of some plots (especially the competitive quality plots).

Compared with Nanjing and other cities, there is still room for regulation and control in Hangzhou. For example, Nanjing not only stipulates that all plots should compete for quality, but also stipulates that land can not be listed within six months.

"Each family has different estimates. At least 20% in the past and 15% now, there are five points more than the original." A real estate enterprise in Hangzhou believes that the second centralized land supply has left a profit space for developers. Another real estate enterprise related person who made a large-scale effort in Hangzhou's first centralized land supply disclosed to the 21st century economic reporter that he was still interested in participating in the second centralized land supply, but he had to make a lot of luck. There is a consensus among real estate enterprises that in the first centralized land supply in Hangzhou, Rongxin's purchase of 7 pieces of land by 14.32 billion yuan will not be repeated, unless developers dare to take risks and have enough money to compete for high-quality land.

In addition to the first tier cities, Nanjing, Suzhou, Chengdu, Tianjin, Shenyang, Qingdao, Jinan and other cities that have been adjusted to provide land for the second time by the government, share the common ground of these second and third tier cities: to significantly reduce the cost and threshold of land acquisition.

However, during the recent performance centralized release of the interim report, the management of various real estate enterprises expressed a very clear view at the performance meeting, and looked cautiously at the second centralized land supply.

The rules of the local game change: most of the first round of centralized land supply does not make money?

Hangzhou's second round of centralized land supply new regulations, industry insiders believe that it is equivalent to the government's "price limit" of land. Checking the source of funds, strictly controlling the participation of the vest company and other means have repeatedly appeared in the land market regulation. The real estate enterprises getting the land are more and more similar to the ordinary people buying houses. Now they have to make a lot of decisions (after reaching the ceiling premium).

Although the new land auction rules have reduced the premium rate and the initial auction price of some plots has been slightly lowered, the profits of real estate enterprises are still very limited. In particular, the competitive quality of land, even if the starting price of land in the future, may also face losses. Moreover, the time cost and risk coefficient of existing house sales are still very large; 40% of the investment and sales ratio of the red line also blocked part of the real estate enterprises, these real estate enterprises even "car" qualification.

This also shows that the qualification requirements for real estate enterprises are getting higher and higher. However, according to the information released in the performance conference of the China Daily in 2021, many leading real estate enterprises believe that in the first round of centralized land supply, most land prices in 22 cities have increased to varying degrees, except for some special cities. A head real estate enterprise disclosed at an investor meeting that according to the company's research, nearly 60% of the first batch of centralized land supply land is not profitable, and even more of them may be at a loss. This may be the reason why the land price has been reduced after the adjustment of the new regulations on land auction.

For example, in the second pilot project of centralized land supply in Hangzhou, although the starting price of some plots has been lowered, it is still difficult to balance the accounts due to the sale of existing houses. Developers are not afraid of low net profit margin (1% is acceptable), but most afraid of no payment, no cash flow. Under the background of reducing leverage, the financing cost becomes unbearable. After calculation, some real estate enterprises said that even if zero premium won the competitive quality land parcel, it would also face losses.

In fact, the adjustment of Hangzhou's second centralized land supply is also lower than the industry's expectations. For example, the demand for increasing the scale of land supply did not appear; The expected price cut, also did not appear in large areas. Since the beginning of September, Hangzhou is experiencing a wave of red market, and there will be a number of real estate projects with extremely low winning rate, and real estate enterprises will soon reap cash flow. At this time, the second batch of concentrated land supply in Hangzhou and other places was set after the national day; More than a month later, real estate companies just have money to take land.

Chen Hongni, executive director and chief executive of Xiangsheng holding group, founded in Zhuji, Zhejiang Province, pointed out that in the first half of this year, 22 key cities have completed the first round of centralized land supply from April to June, and Xiangsheng has actively participated in and obtained some high-quality land, especially in Zhejiang Province. At the same time, facing the policy changes in the second half of the year, Xiangsheng will actively study the rationality of the policy itself and the land project itself, and then make corresponding planning.

Lin Zhong, chairman of Xuhui, has a new discovery: after the first centralized land supply, the cooperation of the whole industry has been strengthened. Therefore, he made a decision. After the second batch of centralized land supply policy has been optimized, it is necessary to continuously improve Xuhui's consolidation model and increase its equity proportion in all joint operation projects. In the next three or four years, Linzhong hopes to increase Xuhui's consolidated statement ratio and equity ratio to about 70%.

Diversification of land investment: low expectation of land auction by real estate enterprises

Before that, in the first round of centralized land supply, many head real estate enterprises rarely took land. Facing the second round of centralized land supply, they also insisted on their own land acquisition rhythm. Like Shimao. At the performance meeting of the China Daily News on August 30, Xu Shitan, vice chairman of the board of directors and President of Shimao holdings, said that Shimao also took a lot of land outside 22 cities.

It is revealed that through land acquisition through cooperation, Shimao acquired more than 20 billion rights and interests of land in the first half of 2021. In July and August, the land price had a correction, Shimao added 10 billion investment. In other words, since 2021, Shimao has invested about 30 billion yuan in land.

Vanke's prediction of the land market has always been in the forefront of the industry. Zhu Jiusheng, President of Vanke, pointed out that the supply side of the land market does present some diversified characteristics. For example, there are all kinds of channels. First of all, double concentration is a new way. Then, you may also notice that M & A at the project level is also a way.

One fact is that in the past three years, the acquisition and merger of Vanke at the project level has accounted for nearly 40% of the total investment in development business.

More and more head real estate companies are investing in land acquisition, and Shimao has come out with a characteristic path. Xu Shitan believes that the current regulation does not encourage speculation and irrationality; We should encourage independent investment and prudent investment“ Of course, the premium rate has been limited in the second round of land supply, but there are also some new management methods that we are actively studying. If we see a good opportunity in the second half of the year, because our cash is still OK and we can invest prudently, it is certainly impossible to take some expensive land. " Xu Shitan revealed.

Throughout the country, in the first half of this year, the land transaction area decreased by 11% year on year, and the price rose in volume, and the profit space of real estate enterprises was compressed. The 21st century economic reporter learned by combing the data of China Daily that many real estate enterprises have actively opened up diversified land acquisition modes from the investment performance of real estate enterprises in the first half of the year.

For example, Jinke disclosed in the interim report in 2021 that the proportion of projects acquired from public market bidding, auction and listing in the first half of the year also dropped to 43%, and the proportion of projects obtained by means of "real estate + commerce", "real estate + industry" merger and acquisition, primary and secondary linkage, etc., has increased significantly to 57%.

It is worth noting that even Zhongliang real estate, which is not particularly dependent on centralized land supply, has sold several plots in Chengdu, Suzhou and other places in the first round of centralized land supply. You Sijia, chief financial officer of Zhongliang, disclosed that for projects in cities with centralized land supply, because of price limit, Zhongliang will not necessarily do consolidation. However, he said that in the future, he will observe some progress of current policies and take actions as expected.

Chen Jun, chairman of the board of directors and chief executive of Greenland Hong Kong, pointed out that the second regulation of centralized land supply shows that the pressure has been transmitted at different levels: from financial institutions to real estate enterprises, from real estate enterprises to local governments. Consumers' expectations are also changing. From the perspective of the real estate industry itself, in fact, from the whole economic environment, the rectification process of medical care, education and capital in a large area makes the purchasing power of the whole society change greatly. In his opinion, will the overall regulatory thinking be further deepened, or will it be eased after the acceptance crisis of many enterprises? At present, it is still to be observed and a good problem has been raised for the industry. Therefore, the overall investment of Greenland Hong Kong in the second half of this year is not to complete the plan, but to choose appropriate investment opportunities according to the market adjustment.

As a small and medium-sized real estate enterprise owner, Lin Rongbin, chairman of the board of directors of Sansheng Holding Co., Ltd., also believes that the purpose of centralized land supply is to limit the land price, but from the perspective of the first land supply, the effect is not very good, so the second centralized land supply only presses the pause button; Now there are many policy changes in the second batch of land supply, which tend to have quality and various aspects to leave certain space for real estate. This is a good thing for the real estate industry as a whole. According to its disclosure, Sansheng real estate investment follows the "4-3-3" investment logic, that is, 40% of the land acquisition, 30% of the merger and acquisition, and 30% of the investment direction of bidding, auction and listing, including 850000 square meters in the first half of this year, is basically achieved through the mode of land acquisition.

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