The Logic Of The First Round Of Centralized Underground Land Acquisition: There Is No Absolute Winner When Turning To The Sinking Market

"This centralized land supply is really difficult. I've been working overtime every day recently. " Lin Lin told the 21st century economic report that he was a member of the investment and Development Department of a top 10 real estate company. Because the new regulations for centralized land supply came suddenly, he was still looking for his work rhythm.

The policy of "centralized land supply" originated on February 26. The head of the Department of natural resources development and utilization of the Ministry of Natural Resources announced that 22 key cities would implement a new policy of "two centralization" for residential land this year. The so-called "two concentration", the first is the centralized release of the transfer announcement, in principle, no more than three times a year; the second is the centralized organization of transfer activities.

Subsequently, the "two concentration" of land supply has been implemented in China, and the land acquisition logic of real estate enterprises has also changed fundamentally. Although the open market is still the main battlefield, it no longer occupies the core position. More real estate enterprises have turned to other diversified channels: the status of urban renewal and industrial land acquisition has been improved, and the areas not outside the 22 hot cities are waiting for the real estate enterprises to attack.

Although the industry generally believed that after the centralized land supply, the leading real estate enterprises with financing advantages will become the big winners. However, according to many leading real estate enterprises interviewed by the 21st century economic report, this conclusion is not entirely true. The reason is that although the cost of capital is low and the product capacity is strong, their flexibility may not be as good as that of medium-sized real estate enterprises specializing in technology, Short time to raise a huge margin, even the leading real estate enterprises are not easy. The operation logic of land market has been reconstructed again.

After "two concentration" of land supply

After the centralized supply of land, people from the investment and financing outlets have the most real feelings about the current situation.

Li Li works in the investment department of a top 30 real estate company. After the implementation of the land "two concentration" policy in various places, his workload increased by two or three times in an instant. "We need to arrange the funds in advance and select the plots selectively. Although there is no substantial difference from the previous land supply mode, a large number of land will be transferred in a short period of time, so the work intensity has been improved a lot."

Last year, the pressure of the "three red lines" of his real estate company dropped, and the investment volume was reduced. Many investment and development personnel gradually left their jobs. "At the peak, there were seven or eight people in a month. Now there are not many people, and the workload is going up. In the past, we may have been responsible for the calculation of two or three pieces of land by one person, and each person would have at least seven or eight pieces of land. "

Investment people are busy measuring land, financing people are busy raising money everywhere.

Chen Shu, a financial department official of top5 real estate enterprises, told 21st century economic report: "it's good to see several pieces of land recently, but we're not well off now. As long as we can borrow money, we'll have a chat. Now some of them are willing to lend us money. The cost is higher than the "internal red line". However, we can't find any money in other places. In the end, the group approved it. "

Land acquisition and financing are the lifeblood of real estate enterprises. If the use efficiency of funds is not improved, the balance of the system may be broken, which has a particularly significant impact on the tight capital chain of real estate enterprises. "Under great financial pressure, natural calculation lags behind people, and it is necessary to make breakthroughs in cost or price, otherwise it is difficult to improve their bidding ability." Chen Shu said.

In the view of many industry observers, after the "two concentration" of land supply, the leading real estate enterprises with capital advantages will have more significant advantages. Just as Jiang Tiefeng, the managing director of China Merchants Shekou, said publicly that after the centralized land supply of 22 cities, enterprises will face the situation of centralized listing of land, which requires enterprises to have a large amount of funds to purchase land, "this is an opportunity for enterprises with low capital cost and strong capital strength."

But after the real landing, the feelings of all parties are not the same. Lin Lin pointed out, "this is not a good thing. If according to the scattered land supply, in a long period of time, the strong capital strength of leading real estate enterprises can participate in most of the competitiveness, but centralized land supply can not provide so much capital. "

An observable reality is that from the financing side, in the first three months of this year, the amount of financing of real estate enterprises has declined, and the capital level is still tightening, so is the top 10 real estate enterprises. According to the data of Shell Research Institute, in the first quarter of 2021, the accumulated bond financing of domestic and foreign real estate enterprises was about 304 billion yuan, a year-on-year decrease of 23%; among them, the top 31-top 50 real estate enterprises had the largest decline, with a year-on-year decrease of 62.06%, followed by the top 10 real estate enterprises, with a decrease rate of 57.71%.

Subsidence and change of land taking channel

After the "two concentration" of land supply, investors and developers have become the most ridiculed group. It seems that they work for three months a year and have nothing to do at other times. However, this is definitely not the case.

Li Li told the 21st century economic reporter seriously that their company's strategy is that they will turn to more third and fourth tier cities in addition to the open market. "In other times, we should broaden our horizons and see if there are opportunities for mergers and acquisitions in third and fourth tier cities. It is by no means a wait-and-see situation."

In fact, the land acquisition logic of the leading real estate enterprises has been quietly changed. Urban renewal, rail property and industrial land acquisition have been included in the land acquisition plans of many real estate enterprises, but the new land supply policy in the open market has accelerated their evolution.

Take Vanke, China shipping and China Merchants Shekou as examples. From their recent actions, they have a strong desire for change. On April 19, 2021, China Merchants Shekou announced on the official public account, which is a recruitment plan related to urban renewal.

China Merchants Shekou said it has identified urban renewal as an important starting point for the development of the real estate 2.0 era, and will recruit related posts in 30 cities, including Guangzhou, Ningbo and Xiamen.

Yu Liang, chairman of the board of directors of Vanke, has previously publicly stated that with China's urbanization entering the second stage of development, the construction of a world-class metropolitan area will become the core driving force for China's next round of growth. For example, Tod, urban renewal, large-scale and complex projects, etc., will become essential elements of future cities.

In the past, Vanke, as a real estate enterprise, had a significant advantage not in the treatment of urban renewal or other large and complex projects. Compared with the net land obtained in the open market, such projects are very cumbersome to promote. Vanke has less relevant experience in the past, so whether it can adapt to this logical change has become the most concerned place for investors and the industry.

In an interview with the 21st century economic report, a person who has been deeply involved in the field of urban renewal in Shenzhen said that the leading real estate enterprises are "not very optimistic" in the field of urban renewal. In his opinion, urban renewal is a kind of "meticulous work". There are many ways to do it. There are also some real estate enterprises in Shenzhen who are already very mature. They are also familiar with the secret of negotiation and know more about the pit in it.

However, the leading real estate enterprises in the past have little to do, and they are not willing to spend too much energy to gnaw hard bones. At this time, they are even more needed to make up for their shortcomings. "Their teams are not very professional, and some of them are outsourced to small demolition companies. They give a lump sum price, but because they are not in-house management, they leave a lot of holes. We should build our own team slowly, and give time slowly. "