On June 28, CapitaLand Group packaged 6 Raffles and sold them to China Ping An Life for a price of 9.6 billion yuan. A week before, “Chartering Company” Pan Shiyi sold 91% of SOHO China’s equity to Blackstone Group for a transaction price of US$3 billion. On June 7, Harmony Health acquired Beijing SK Building for 9.06 billion yuan.
Within 22 days, three large transactions in the field of commercial real estate totaled about 38 billion yuan. Such intensive and high-standard transactions are rare in the industry. But the signal behind it is that insurance capital, asset management and other institutions are attacking China’s commercial real estate assets, and the price is not high.
” From the perspective of the performance of large-scale property transactions, although the transaction market cycle has become longer, under the two-wheel drive of self-use and investment, market activity has not declined. Investors Continue to maintain a high degree of attention to high-quality projects in the market.” On June 24, at the 3rd China Commercial Real Estate Brand Building Forum, Liu Kai, deputy secretary general of the Quanlian Real Estate Chamber of Commerce and chairman of Fangxun.com, told the Securities Daily and other media , Whether for self-use or investment, office buildings are still the first choice for commercial real estate investors.
As Liu Kai said, as a subdivision of real estate, shopping malls, office buildings, and industrial parks are important carriers for regional economic development and professional transformation, but regions are excluded The phenomenon of high market fever, from the perspective of the overall national market, the current commercial real estate has been at the peak of supply for many years, which has promoted the increase in the vacancy rate and the decline in the level of rent (selling price).
Between “high” and “lower”, even the core commercial and office assets of first-tier cities, plus first-class operators, seem to be unable to withstand operation Due to the low return rate and the heavy pressure of fund accumulation, they are eager to exit the market to seek “safety”. What’s wrong with the current commercial real estate? With this kind of thinking, the reporter of “Securities Daily” tried to explore the truth of the current commercial real estate market through interviews and research.
Three outstanding issues
From the perspective of market size, according to the statistics of the Shell Research Institute, the average annual compound growth of the commercial office area in the past ten years The rates are all over 10%; as of 2020, the area of commercial buildings will be 2.9 billion square meters; it is conservatively estimated that if the total real estate sales in 2021 is 17.5 trillion yuan, of which residential properties are 14.3 trillion yuan, commercial real estate is about 2.6 billion square meters. Trillion yuan.
Of course, the scale of stock commercial real estate is even greater. “In 2021, there will be an estimated 700 million square meters of office buildings in the country, and about 17 billion in industrial parks.Square meters, China has a large stock of assets. “Min Jie, chairman of Kapok Hui Group Co., Ltd., told the Securities Daily that its three major manifestations are low rental yield, extensive operations, and undervalued assets.
No It is hard to see that the above “three major performances” have brought about the current market situation with high vacancy rates. According to the statistics of the Housing News Index, in the second half of 2020, the vacancy rates of office buildings in first-tier cities will all run above 20%, setting a new high in ten years; Shanghai And Shenzhen even exceeded 25%. The average vacancy rate of office buildings across the country is close to 30%, and the vacancy rate of commercial buildings is as high as 35%.
The 2021 China Top 100 Commercial Real Estate Research Report pointed out that there are three outstanding problems in the current commercial real estate market. First, the overall new supply is large, and long-term idle assets affect sustainable development; the second is the serious demand for new businesses, industries, and offices. Insufficient, unable to support such a large-scale supply; third, there is a mismatch between industrial development and Grade A office buildings in the commercial real estate market.
Three directions of change
“Although the short-term huge supply and inventory depletion are still the tests that the market needs to face, the long-term commercial real estate The situation has not changed for the better.” Liu Kai, deputy secretary-general of the Quanlian Real Estate Chamber of Commerce and chairman of Fangxun.com, told a reporter from the Securities Daily that with the continuous advancement of the country’s financial opening and technological innovation, the office market is still growing. Space, industry in-depth operation and innovation trends will also be further deepened.
In Liu Kai’s view, China’s commercial real estate has not only achieved rapid recovery on the market side, but commercial real estate companies have also actively adjusted their strategies to operate, light assets and smart technology. Empower the development of the industry and meet the trend of consumption internal circulation with a brand-new business model, thus entering the “new track” of high-quality development. Under the new cycle of high-quality development, the development of the commercial real estate market is undergoing three major changes. First, the transition from development to operation. In the era of commercial real estate stock, the industry has shifted from development-driven to operation-driven, and operational capabilities have become one of the core values. Leading commercial real estate companies abandon the simple rent collection model and turn to heavy operations, demand benefits from management, promote value enhancement through asset operation, and provide commercial real estate users (terminal corporate users) with more professional and diversified management services. Second, the shift from heavy assets to light assets. With the long-term decline in industry profit rates and leverage, “heavy assets” is no longer the best choice for commercial real estate companies, and the “light assets” model with low risk, high return and high degree of specialization is popular. Third, the transition from intelligence to digitalization. Digital economy and new infrastructure policies promote the development of commercial real estateDigital transformation, the development of the Internet and digital technology reshape the development model of commercial real estate.
Most industry insiders agree that the future development of China’s industrial real estate will face four major trends: the development model will shift from “selling houses and selling land” to “holding operations”, and product models It will shift from “park economy” to “urban economy”, the profit model will shift from “customer thinking” to “partner thinking”, and the operating model will shift from “management park” to “service park”.
At the same time, as the first batch of nine infrastructure public offering REITs went on sale, China’s public offering REITs, which had been brewing for more than ten years, were finally born. Public offering REITs have opened up the full life cycle development model of “investment, financing, construction, management, and withdrawal” of commercial real estate, and at the same time opened the door to commercial real estate investment for investors.
(Original title: 38 billion yuan in commercial asset transactions within 22 days, high office vacancy rate plight to be resolved)