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Second Tier Land Market "Thaw" Developers Jointly Take Risks

2020/2/13 8:37:00 2

Second TierLandMarketDevelopersJoint Venture

Land is the gate of developers.

In February 10th, many housing enterprises began to resume work. Home office, peak shift to work, video conferencing and so on were all busy, and the frozen land market began to "thaw".

Beijing, Shanghai and other cities can not wait to launch online auction, many housing enterprises immediately invested in it, and billions of billions of dollars of funds are running.

Continuation of last year's trend of returning to the second tier and the second tier, developers are still more concerned about the second tier land.

Under the haze of the epidemic situation, is the risk of taking the risk at the moment or the opportunity to copy the bottom? "The enterprises that we dare to take now are warriors, indicating that these enterprises are not nervous about the capital chain, and they are also confident that the epidemic will be resolved quickly." Central Plains real estate chief analyst Zhang Dawei said.

Just as the famous saying in investment circles is, when people are pessimistic, they are cautiously optimistic. Who will be the winner of the earth auction market in the future?

The answer may be more than one or two. In the environment where the sale of the real estate market can be narrowed, the financing is tight and the black swan is in the environment, developers who can cooperate smoothly and strong together may go further.

Land sale in epidemic situation

In the first tier cities, Beijing pioneered the "first shot" of land transactions in the first year. In February 11th, the Beijing land market opened 3 unrestricted plots, which were located in Shijingshan West Huang Village, Tongzhou Majuqiao and Daxing Cai Yu Town, with a total construction area of about 360 thousand square meters, 12 developers seized land, and finally received 8 billion 5 million yuan.

Shanghai also issued a circular on the same day. The 28 plots of Huangpu Jiangnan extension in Xuhui District Huangpu will be officially listed. According to the plan, the total development scale (including the underground scale) is about 1 million 800 thousand square meters, and the starting price is up to 31 billion 20 million yuan, which will be officially opened in February 20th.

This can be said to be a rare large-scale land sale in Shanghai in recent years, and the bid price has already exceeded the epic level of Shenzhen last June.

In addition to the "thawing" signal issued by the first tier cities to boost market confidence, the cash flow of some state housing enterprises in the beginning of the year is abundant and actively takes place.

In February 3rd, the price of 5 billion 900 million yuan for the Shekou price competition was awarded to Jiangsu Nantong homestead. The plot was planned for residential land, with an area of 190 thousand and 800 square meters and a floor area ratio of 1.8-2.05.

Beijing's first shot of Majuqiao, Tongzhou, attracted a number of brand housing companies to participate. After 40 rounds of fierce competition, it was finally concluded that Huarun and CIC were selling at a price of 4 billion 670 million yuan, with a premium rate of 22.9%.

There are also some small and medium-sized Housing enterprises to take the "radical line", adding enough horse power to expand.

In February 3rd, Dahua Group won the Hangzhou Hangzhou Qian Tang plot at a total price of 1 billion 349 million yuan, with a premium rate of 17.41%; Zhongan group won 1 homestead in Hangzhou Fuyang district at a total price of 998 million yuan, and the premium rate was 11.14%; Zhongtian nice group joined Zhejiang Zhongteng real estate, with a total price of 413 million yuan competing for Zhejiang Jinyang's homestead, with a premium rate of 8.68%.

Cities affected by the epidemic are expected to gradually return to the track of operation, but many parts of Tianjin, Suzhou and Chongqing also postpone the sale of some land.

In February 3rd, the Tianjin Land Exchange Center announced that 5 plots of land had been postponed, while two land auctions in Suzhou had been postponed to 19 days from the original auction in February 7th. Fuzhou also decided to postpone the first time in 2020 for February 17th to February 27th.

Although some capital adequacy developers are full of confidence, so far, the trend of the epidemic is still stuck, and the delay in land transactions has led many housing companies to take a more cautious approach.

The power and enthusiasm of the first tier cities, especially Beijing and Shanghai, seem even bigger. In 2019, the "land of ice and fire" appeared in the land market. The land of second tier cities was concerned by housing companies, while the three or four line urban land was flat.

According to CRIC data, the volume of the second tier cities in 2019 reached 24%, up two percentage points from 2018.

However, a sudden outbreak will affect the current urban development pattern. When a second tier city plan continues to develop for the better in 19 years, Wuhan, a second tier city, is forced to suspend its progress.

The middle finger Research Institute recently launched a survey of 500 real estate managers. The results show that enterprises with 1/3 will reduce the proportion of land in the serious epidemic area.

However, developers are confident of the future of Wuhan. More than 55% of people said that the proportion of cities and towns in the region was not affected by the epidemic.

Opportunities for the second half

Generally speaking, housing prices are matched with sales, and a certain proportion of sales corresponds to a certain proportion of land funds. If it exceeds 60% of current sales, it can be regarded as radical.

Affected by the epidemic, sales in the first quarter of this year will be severely declined. Central Plains data show that during the Spring Festival Golden Week, property sales fell by 95%, and land transactions in February are expected to decrease sharply.

However, many people in the industry pointed out that the delay in shooting in February had limited impact on the land supply plan for the whole year, and the second half was the main battlefield.

According to the report of the middle finger Research Institute, 45% of managers believe that the scale of the whole year is down compared with that of last year, and 31% think it is basically the same as last year, and another 21% think it will exceed last year.

Zhang Dawei also said that the recent dare to take place are actually warriors, if the epidemic situation can be alleviated quickly, the operation must have been a copy of the bottom, getting the premium base price plot and overtaking the curve, but if the epidemic continues to affect, then it will probably fall into the mire.

In the face of risks, many developers choose to strengthen cooperation and jointly take the land. This seemingly "conservative" approach is already the preferred cooperation of mainstream housing companies.

In June 29, 2018, Vanke, Pauli and Longhu three leading housing enterprises jointly took the Chen Guang and Yue of Chengdu. In January 16, 2019, Vanke and Biguiyuan first worked together to develop Qingbaijiang's 157 acres of homestead in Chengdu.

This year, there are many phenomena of "tug of heating". In January 16th, two residential blocks were sold in Qingdao, Shandong. In the end, the fusion group (Rong Chong + Longhai) took one of them at the lowest price. Similarly, Tongzhou's Majuqiao, which was first taken in Beijing, was CO produced by Huarun and China cooperation.

Yan Yuejin, director of the research center of Yi Ju think tank, said that since 2019, the enthusiasm of central enterprises has been improved, which is related to their financial strength. Some housing enterprises are affected by the epidemic, and the auction site can be considered to be decentralized through cooperation with the central enterprises.

It is worth noting that Xi Zheng capital pointed out that this wave of epidemic will further widen the gap between housing enterprises and increase the concentration trend of the real estate industry. Mergers and acquisitions and bankruptcy reorganization will also usher in new opportunities in 2020.

According to some developers feedback, some of the asset package projects that have been pushed forward some years ago, the psychological expectations of partners or counterparties will also be reduced, and there will be more room for cooperation or price.

In addition, the financial platform of individual state owned developers has set up specialized departments to operate "uncompleted residential flats" investment and acquisition business, which also shows that mergers and acquisitions under this market is a great opportunity.

 

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