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The influx of developers into the industrial real estate

release time:2018.05.24 view count:1106

The real estate industry has entered the second half, and finding new business growth has become a problem that every real estate enterprise must consider.

“Zhengrong Industry should become the second core growth pole of Zhengrong Group, and it can use 3-5 years to compare the scale and efficiency of Zhengzheng Real Estate.” Lin Chaoyang, the director of Zhengrong Group and the chairman of Zhengrong Industry, told the A financial reporter.

The First Financial Reporter noted that housing companies including Country Garden, Huaxia Happiness, Longhu, Zhengrong, Greenland, Jindi, Taihe, etc. all entered the industrial real estate sector in different dimensions. For housing companies, this area is unfamiliar but also blue ocean.

Big developers preemptive layout

In February of this year, Zhengrong Real Estate (06158.HK) announced that it would appoint two co-executive CEOs, Lin Chaoyang and Wang Benlong, respectively, which was only one and a half months away from Zhengrong Group in Hong Kong.

Subsequently, Lin Chaoyang began to be responsible for the business group of Zhengrong Group. According to the plan, Zhengrong Industry includes education, medical health, consumption upgrading, quality living, cultural tourism, rehabilitation and rehabilitation, and the seven industrial clusters of smart cities; four major development models of characteristic towns, cultural tourism, regional development and urban renewal. Five operational services: park operation, education operation, commercial operation, business travel operation, and community operation. By building an industrial platform and integrating resources from all parties, it may be holding or it may be a shareholding. This will make the cake bigger and more participants can share such benefits.

Not just Zhengrong, other housing companies are also quietly deploying industrial real estate business.

In May this year, Yida China (03639.HK) issued a notice saying that Dalian Software Park Zhongxing Development Co., Ltd., a wholly-owned subsidiary of the company, entered into a property transfer agreement with Longhu Real Estate. Longhu will spend 2.6 billion to purchase Yida China in Dalian High-tech Park. Certain properties.

Subsequently, Longfor Real Estate signed a strategic cooperation framework agreement with Yida China to establish a strategic partnership, and cooperated in the development of production city integration projects, industrial park investment operations, industrial investment operation services, and equity investment. "At present, industrial real estate is not our main channel business, but we also want to actively try." Long Ming Real Estate CEO Shao Mingxiao told reporters.

As early as 2016, Country Garden entered industrial real estate. In April 2016, the company invested RMB 85 million to set up the “Tsinghua University Country Garden Education Fund” to support Tsinghua University’s transformation of scientific and technological achievements in the fields of architecture science and big data, and to build a technology town with a fusion of production and city; in June 2016, Cooperated with Baifu Oriental to establish a platform company - Country Garden Baifu Production City Development Company; from August to December, it obtained 5 industrial real estate projects in Huizhou, Dongguan and Hebei Sanhe. The projects are all located in the science and technology town, in the planning of Country Garden. Around Shenzhen, Country Garden is the main venue for the future development of the Country Garden. In the next five years, it will invest 100 billion yuan to build 10 satellite cities called “Technology Towns”; in 2017, it will become a second largest shareholder.

Xu Jiajun, senior vice president of Jindi Group, told the reporter: “Goldenland’s park operations are 100% self-sustaining, and the cash flow back to positive cycle is longer than residential, and the return on investment is not as high as residential development, but this is a stable cash from the long-term. Flow is currently a blue ocean market, so Golden Land chooses to enter strategically."

In his view, finding a new business growth is especially important for a company that wants to achieve long-term success.

Operational strength faces big test

Many industry insiders interviewed by reporters said that the current housing enterprises are strategic considerations for the above-mentioned market entry, and the operational capability is the core that restricts housing enterprises from doing industrial real estate.

"One-stop problem solving is very important. Hardware and services are important operational support. Huaxia Happiness is doing an industrial town and an ecosystem. It provides film and television production through the one-stop industrial platform operation. Service, attracting enough businesses in the upstream and downstream of the industry chain, this system can only improve the efficiency of industrial operation." Li Ying, head of Huaxia Happiness Creative Industry told the First Financial Reporter.

Li Ying said that the cultural and creative industry represented by film and television is one of the advantageous industries of Huaxia Happiness Industrial Town. Huaxia Happiness hopes to build a closed loop of the film industry in the whole industry chain of film and television, and hope that the producers will enter with the script and the project. The industrial town, with the production of film and television works to leave, promote the industrialization of China's film industry.

The European and American Financial City (EFC) built by Zhejiang Construction Engineering Group in Hangzhou Future Science and Technology City also strengthens its services. This comprehensive project, in addition to the conventional integrated business, has also built an incubator from Co-Working to the office building. The model of high-end commercial space leasing, and the introduction of the world's well-known incubators such as the US Silicon Valley Incubator PNP and the Canadian innovative incubator Istuary.

“Incorporate the entrepreneurial team with international support and create a business incubator carrier to serve the entrepreneurial community of Haigui. By cooperating with start-ups, venture capital institutions, entrepreneurial geniuses, technology experts and large enterprises, integrating resources to make it a global Venture capital incubation platform." Chen Kaiyu, executive vice president of Zhejiang Construction Engineering, said in an interview.

For each housing company, they are aware of the importance of resource integration and improve service capabilities, which is the foundation of investment.

"Our investment team has hundreds of people, and all kinds of resources are docked. Only by constantly improving the service can we attract everyone to participate in our project." Li Ying said.

Yu Yudong, vice president of Country Garden Shenzhen, told the First Financial Reporter that there are 4 in the 9 production projects in Shenzhen, 4 in Baoan District and 5 in Longgang District. If there are more than a dozen projects in the talks. Yu Yudong revealed, “Some projects have a long preparation period. The company has no regulations on how many projects to hold in the year. Our internal slogan is to be one. The main job is to do the first operation of the opening project. ”

Previously, many developers entered industrial real estate more than real estate rather than industry. As the industry began to mature, housing companies also realized that only the industry first, can judge the entire project and create more value-added opportunities.

Is the blue ocean is also a challenge

When most of the mainstream housing companies have completed the nationalization, it is necessary to gradually diversify their business through cross-border operations.

In the process of new urbanization, investment structure and consumption structure upgrading bring more market opportunities, and industrial real estate is one of the means of breaking demand.

Yan Yuejin, research director of Yiju (blog) think tank, pointed out that the changes in the market cycle have brought about profound changes in the industry. The profit rate of the residential market has further declined. In the past, housing companies with limited space development have only integrated resources.

Zhang Hongwei (blog), director of the same policy consulting research department, believes that land costs are increasing due to the saturation of the domestic residential market and the structural changes in land supply in first- and second-tier cities. Increasingly high land prices, coupled with higher and higher management requirements for land acquisition companies, such as requiring a certain proportion of affordable housing or public construction projects for residential projects, or requiring developers to own a certain percentage of commercial projects It makes it more difficult for some traditional housing companies to take the land. The advantage of land acquisition behind industrial real estate is obvious. When the management introduces such industry operators, it will give some targeted supply of residential land.

"There is also a benefit of industrial real estate, which is to help developers to raise funds. At present, banks basically do not provide funds for housing, but after they hang on the industry, they can get more funds." An industry source pointed out.

Taking Zhengrong as an example, its industrial group signed a 10 billion yuan financing strategic cooperation agreement with Industrial and Commercial Bank of China, China Eastern Asset Management Co., Ltd. and China Construction Investment Trust Co., Ltd., with a total amount of 30 billion yuan.

Driven by various factors such as capital and development prospects, industrial real estate has become one of the outlets of real estate in 2018.

Chen Cong, a real estate analyst at CITIC Securities, believes that for real estate, in addition to traditional rental income, real estate developers can also expand their income sources by providing financing consultants, management consulting services, and even acquiring small and medium-sized enterprises.

A report from Yihan Think Tank pointed out that in the real estate industry entering the resource-driven big cycle stage, whether it is developers, manufacturing or financial capital, the purpose of entering the industrial real estate industry is nothing more than putting high-quality resources into the bag to seek for itself. With continuous development, industrial real estate is bound to become the best carrier for all kinds of capital to seize the right to speak in the industry.

Ding Zuyu (microblogging blog), CEO of E-House China (Enterprise), said that as a mainstay of China's pillar industry, housing companies have entered various related fields. As the market space for incremental growth in China's real estate industry becomes smaller in the future, companies will also strengthen their exploration of these related fields to seek new business growth points.