After eggshell, can real estate enterprises become the “antidote” of long-term rental apartments?

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Welcome to the wechat subscription number of “chuangshiji”: sinachungshiji
By Chen Dengxin
Source: zinc scale (ID: znkedu)
Real estate companies start to run around
Real estate enterprises are becoming an important force in the long-term rental apartment market.
On January 4, 2020, many media reported that Vanke intended to increase its weight in the long-term rental apartment track. In an interview with the media, Yu Liang, chairman of Vanke, admitted: “Vanke has been a long-term rental apartment for nearly five years and has lost 9 billion yuan. Until today, I can tell you that Vanke has started not to lose money and understood the operation management logic.”
This means that when the eggshell and other long-term rental apartment brands encounter Waterloo, real estate companies may run around.
According to the data of foresight Industry Research Institute, the market scale of China’s long-term rental apartments has reached 1.73 trillion yuan in 2019, and is expected to exceed 3 trillion yuan by 2025.
On the track of long-term rental apartments with broad prospects, why have real estate enterprises been in a relatively backward state before? Without the inherent defect of rent loan, why is it still difficult to rise?
There is no rental loan, there are other pits
“Renting a house is by no means a simple matter. You may encounter bad landlords, black brokers, or even worse, jump into the fire pit.” Zhou Tang, who has more than three years of rental experience, said.
After graduating from university in 2016, Zhou Tang made a living in Xi’an, and renting a house became a top priority. For quite a long time, he shared many places with his classmates, and encountered many troubles.
For example, once the air conditioner broke down, the landlord taught them how not to cherish things, and broke her air conditioner. Later, the air conditioner after-sales maintenance master said that the air conditioner had not been used for a long time, and the compressor was out of order, which led to the failure of the air conditioner. “It’s unreasonable to turn over the face, and neither agree to the contract nor consider discussing it.”
After unbearable, Zhou Tang set his eyes on the long-term rental apartment.
At that time, Zhou Tang and his colleagues fell in love with a house operated by an Internet long-term rental apartment. They paid a deposit and signed it once a year, but the rent could be paid monthly. When signing the contract, the other party took out a pile of documents and asked for signature.
“The so-called monthly payment is” rent loan “. The bank pays one year’s rent to the apartment in advance, and we pay back the bank’s money every month.” Zhou Tang found a clue in a document, “at that time, he said that all industries were like this, and it didn’t affect the credit investigation, so he was afraid of nothing.”
Zhou Tang searched the Internet for a while and found that the leading enterprises of long-term rental apartments such as Ziyuan did have this appeal, and finally signed the contract. Fortunately, a year later, the thunder wave of long-term rental apartments on the Internet began to appear, and Zhou Tang and his colleagues did not renew the contract after the contract expired.
Zhou Tang told Zhang Jie that now they have moved into a long-term rental apartment owned by Vanke, and there is no demand for “rent loan” at all: “who says this is the hidden rule?”
One problem is solved, and another emerges.
For Zhou Tang, it is hard to bear that the electricity price of long-term rental apartments of real estate enterprises is charged according to commercial electricity. The price varies from 1.2 to 1.6 yuan / kwh in different places, while the former Internet long-term rental apartments are calculated according to civil electricity, that is, the monthly electricity price of 210 degrees or below is 0.5469 yuan / kWh, 210 yuan / kWh- It is 0.5969 yuan per kilowatt hour for 400 kilowatt hour and 0.8469 yuan per kilowatt hour for 400 kilowatt hour and above. In this way, commercial power is two or three times more expensive than civil power, and the cost of living has increased significantly.
“It’s so easy to save 400 yuan a month for water and electricity.” Zhou Tang’s plays abuse Tao.
Some real estate enterprises need to pay separately for air conditioning in long-term rental apartments
In addition, a number of netizens said publicly that there are other problems in the Park apartment.
Crystal clear can’t sleep well. Make noise worse, become a consensus of netizens, and call it a loud voice. Every speaker can hear clearly. Some netizens Tucao: “some young people play music at night, they can’t sleep in bed when they hear the surround sound,” some stores have no lift, and netizens make complaints about takeaway to be taken down on the floor, not to be sent upstairs, and very unhappy; the administrator service is slow to respond. If you don’t move, you don’t care. It takes several working days to repair something. Some people in the public kitchen don’t pay attention to it. They throw pots and pans everywhere
Why can’t real estate enterprises run “eggshells” before?
In fact, the difference between real estate companies and other players is not only here.
The difference between heavy assets and light assets.
The Park apartment of Vanke and the crown apartment of Longhu real estate prefer the mode of heavy assets. The land and property are mainly self-supporting, and they are developed and utilized on this basis, so they mostly adopt centralized operation.
However, chain home’s brands, such as Ziyuan and eggshell, prefer the asset light mode, and do not own land. Almost all the houses are purchased from outside. Of course, there are subtle differences: brands represented by Ziyuan focus more on obtaining the long-term use right of the whole building and some regional properties, and their operations are both centralized and decentralized. Brands represented by eggshell almost do not own properties, but are decentralized It is mainly based on open operation.
The high investment cost of the heavy asset model makes the rental price rise. As a result, the population coverage is relatively limited, and the development scale is not as fast as that of the light asset model. For example, eggshell has more than 400000 houses, while Vanke’s Park apartment has only more than 130000 houses. The gap between the two sides is obvious.
Asset securitization is different from “rent loan”.
The so-called asset securitization is a kind of financing method, which is based on the assets owned by the project, guaranteed by the expected income that the project assets can bring, and raised funds by issuing bonds in the capital market.
It is easy to understand that asset securitization is equivalent to issuing a special kind of bond, which can reduce the pressure of capital flow brought by the heavy asset model and disperse the risk of investment.
According to Kerry’s data, the issuance scale of asset securitization of China’s long-term rental apartments in 2018 was 10.721 billion yuan, and that in 2019 was 5.208 billion yuan, showing a trend of declining scale and capital concentration to the head real estate enterprises.

“Asset securitization is like a tonic, playing a role in physical fitness.” rent loan “is like a stimulant, short-term excitement and long-term loss. Now the” rent loan “model has been falsified, and asset securitization may become an important financing channel at one stroke. Due to the heavy asset model, real estate enterprises have a congenital advantage in asset securitization.”
The difference between earning rent difference and net rent.
In the first half of 2020, the first operating income of the long-term rental apartment industry is 62 million yuan, while the operating income of Vanke’s long-term rental apartment business is 1.05 billion yuan.
Vanke’s long-term rental apartment business accounts for a low proportion of the total revenue
In addition to rent, real estate companies also tap their consumption potential through value-added services. For example, some rooms in Park Apartments of Vanke do not have washing machines, so they can only go to public washing machines to do laundry.
In this way, the long-term rental apartments of real estate enterprises and other long-term rental apartments can be called two species.
Where is the way out?
Although many real estate companies are optimistic about long-term rental apartments, few are willing to pay for it.
According to the data of zhongyan.com, as of 2019, more than 60% of the top 30 real estate enterprises have set foot in long-term rental apartments, of which the newly added scale of Park apartment of Vanke and Guanyu of Longhu account for nearly 60% of the newly added scale of long-term rental apartments of the top 10 real estate enterprises.
In short, Vanke and Longhu are at the forefront of the industry.
Public information shows that park apartments have entered 33 cities, with more than 130000 open rooms and 150000 renters, with an overall rental rate of 94% and a renewal rate of 55%. They have served 400000 customers, with a revenue of 1.05 billion yuan in the first half of the year. Guanyu has about 79000 open rooms, with an overall gross profit rate of 32% – 35% and a rental rate of 88.6%.
In this context, there are still two challenges for real estate enterprises to go further on the track.
On the one hand, the long-term profit model is still unclear. The land cost of long-term rental apartment is high and the return period is long. The loss has become the synonym of the industry, which to a certain extent increases the burden of cash flow of real estate enterprises. In the state of continuous loss, some real estate enterprises spin it off and operate independently to avoid affecting the main business,
Therefore, under the background that the long-term profit point is still groping, although the mainstream real estate enterprises are optimistic about the prospect of long-term rental apartments, few dare to invest heavily.
“One solution is to use collective land to build long-term rental apartments. Enterprises only get the right to operate and use the land, so they don’t need to pay huge land transfer fees. The other solution is to drain the sales of houses. The rent of long-term rental apartments is 100% of the purchase price or parking space within a certain period of time, so as to pass on the operating costs,” a person in the industry told us
On the other hand, it cannot become a core business in a short time. Although the growth of long-term rental apartments invested by real estate enterprises is fast, compared with the main business, it is a small business. It is a 17 trillion yuan market, which means that the focus of real estate enterprises is difficult to move in a short period of time, so they can not get more resources.
“At present, real estate development is still the main business of real estate enterprises, and many long-term rental apartments are in a state of loss, so the scale is small.” Lu Wenxi, chief analyst of Zhongyuan Real Estate in Shanghai, said.
For example, in the first half of 2020, the operating revenue of Vanke’s long-term rental apartment business was 1.05 billion yuan, while the total operating revenue was about 146.35 billion yuan, accounting for less than 0.72%.
In this regard, Yu Liang also said recently: “in the next 5 to 10 years, the majority of Vanke’s income will come from real estate development, which will not change.”
Yu Liang, chairman of Vanke
From this point of view, the long-term rental apartment market is growing wildly or has come to an end, and the real estate enterprises that once lagged behind on the track may speed up the pace of catching up in the era of compliance.
As for how the industry moves from loss to profit, we still need to continue to seek answers.
(statement: This article only represents the author’s point of view, not Sina’s position.)