Transformation and upgrading of traditional real estate

Editor's Note: Bill Gates once said: We always overestimate the "short-term" changes, but underestimate the "long-term" changes in the future. What short-term changes have this epidemic in the "transition sensitive period" brought to the real estate industry? Did these short-term changes accelerate or reverse the transformation and upgrading of the real estate industry? The research institute of listed companies in the financial sector started real estate observation in March, and conducted in-depth exchanges with industry experts, authorities and senior executives of well-known real estate enterprises to clarify short-term changes and long-term changes, and to explore the strategic countermeasures of the real estate industry in the second half of the epidemic.

The COVID-19 epidemic has brought challenges to the real estate industry and its upstream and downstream industrial chains. Compared with residential real estate and commercial real estate, industrial real estate suffered less impact in the short term and became a safe haven for the real estate industry under the "storm" of epidemic, but the epidemic also accelerated the reconstruction of business logic of industrial real estate. The intensity and scope of this reorganization is no less than the "upgrade" of an industry. If you can't keep up with this pace, it will be difficult to evolve in the future.

For a long time, the "high turnover and short cycle" operation thinking of traditional real estate has been a "stubborn disease" of industrial real estate, which has caused a series of problems such as hollowing out science parks, difficulty in attracting investment, and separation from local government interests. Under the influence of the epidemic, the traditional industrial policy and economic environment have changed in two aspects. On the one hand, when the epidemic affects the local economy, the government's demand for the local industrial economy is more urgent; On the other hand, while releasing liquidity to the real economy, the central bank repeatedly emphasized the general tone of "housing and not speculating", which did not bring the expectation that the macro policy of real estate was completely loosened. Under this background, the operation logic of industrial real estate is facing an opportunity of reconstruction, that is, abandoning the traditional real estate thinking, taking regional development and industrial economy as the starting point, embracing the new economic model, and focusing on a new generation of key emerging industries such as information technology, high-end equipment, new energy vehicles, aerospace, energy conservation and environmental protection, new materials, great health and 5G, which has become the main theme of long-term industrial real estate reform.

Two major problems perplexing industrial real estate.

With the development of economy and society and the continuous evolution of division of labor and cooperation, the classification of real estate industry is also deepening. According to the basic functional characteristics of the products delivered by the real estate industry, it can be roughly divided into residential real estate, commercial real estate and industrial real estate. Among them, industrial real estate is an integrated platform of industrial value chain built around the "industrial smile curve", which is characterized by relying on industry and taking real estate as the carrier to realize the overall development and operation of land.

The development and operation mode of traditional real estate enterprises is generally a closed loop formed by land acquisition, development, sales and delivery. However, after nearly ten years' rapid development, especially in recent years, driven by the national macro-control policy of "staying in the house and not speculating", the profit growth space of traditional real estate development is gradually saturated, and the profit growth rate is gradually slowing down, which is vividly called the transition from "golden age" to "silver age" in the industry. The head effect of real estate enterprises is becoming more and more obvious, and the degree of competition in the industry is bound to become more intense. To this end, many housing enterprises want to seek transformation breakthroughs through industrial real estate. However, this road to transformation may not be smooth.

"Traditional real estate is taking the elevator, and industrial real estate is climbing stairs. Entrepreneurs spend a lot of energy climbing stairs, and these energies are cash flow. " Wu Dachuan, the founder of Zhong Rui Foundation, used image metaphor to show the different essence of industrial real estate and traditional real estate.

The core of industrial real estate is industrial economy, and the development of industry needs heavy assets and high cash investment. From the perspective of real estate developers, once the profit of residential real estate is much higher than that of industrial real estate, traditional real estate thinking will occupy a dominant position in the operation of industrial real estate. The profit of residential real estate is high, and the turnover can be completed in one or two years with capital investment, while the industrial layout needs a lot of time and capital investment. Under this contradiction, industrial real estate developers tend to sell houses first, then do industry or even not, which not only leads to the hollowing out of a large number of industrial parks in recent years, but also makes housing enterprises and local governments distrust each other. This is a big problem facing industrial real estate at present.

In addition, how to profit from industrial real estate is another big problem. Ding Wei, vice president of Urban Planning and Rural Design Institute of China Construction Design Group and an urban planning expert, pointed out: "Industrial real estate operators definitely want to share the future value-added and benefits of this land when investing in it, but the state strictly forbids the distribution of the value-added part of the land. Operators can't get a good price when they get the land, and they can't get more benefits from the appreciation of the land after they get the land. This is a big pain point for operators who want to be industrial and another difficult problem for the development of industrial real estate. "

Why is it difficult to transform industrial real estate? Because industrial real estate is not a purely market-oriented product, it is the core of industrial real estate to solve the current industry problems by taking into account the needs of both the market and the government and achieving a win-win situation with the government. Since the outbreak of new crown pneumonia, the central government and local governments have successively issued a series of support policies to stabilize economic development. As the pillar of regional economic development, industrial economy has ushered in the policy window of development in this special period, and industrial real estate has also ushered in the opportunity of transformation and reconstruction. How to seize the opportunity and realize the coordinated development with local governments and related policies is the primary problem that industrial real estate operators should consider in the short term.

Policy promotion

Without this epidemic, industrial real estate may still be slowly "de-real estate" according to the original trajectory. However, the affected local economy can no longer wait for slow and gradual changes. More and more local governments have issued a series of policies to support local industrial economy. Macro-monetary policy and industrial policy are superimposed to support the development of real economy, and industrial real estate has ushered in a policy window period.

In 2020, the central bank has released liquidity to the market through a series of measures, such as reducing RRR, reducing the winning bid rate of reverse repurchase, and reducing LPR. However, when housing enterprises are expecting the real estate industry policy to be "loosened", the general tone of the central bank's successive statements that "housing is not speculation" will not change.

On February 19, 2009, the central bank issued the China Monetary Execution Report for the fourth quarter of 20 19, which summarized the development of China's real estate industry in the fourth quarter, reiterated the basic principles of "staying in the house, not speculating" and "acting according to the city" in the main policy thinking in the next stage, and pointed out that to speed up the establishment of a long-term management mechanism for real estate finance, real estate should not be used as a short-term means to stimulate the economy. Subsequently, Liu Guoqiang, deputy governor of the central bank, once again stressed that "staying in the house and not speculating" is still the general tone of the real estate industry in 2020.

At the same time, the central and local governments have issued a series of support policies to stabilize the economy and promote the development of regional industries. On February 10, the National Development and Reform Commission and other departments and units issued the Opinions on Promoting the High-quality Development of Rural Entrepreneurship, proposing that by 2025, a number of entrepreneurial industrial parks and demonstration areas (counties) with strong influence and integrated development of primary, secondary and tertiary industries will be built.

On February 24th, the National Development and Reform Commission, the Ministry of Industry and Information Technology and other1/national ministries and commissions jointly issued the "Smart Car Innovation and Development Strategy", proposing that by 2025, the technical innovation, industrial ecology, infrastructure, regulatory standards, product supervision and network security system of standard smart cars in China will basically take shape, which can realize the large-scale production of smart cars with autonomous driving conditions and realize highly autonomous smart cars in specific environments. By 2035, the standard smart car system in China will be fully built.

Local governments have also introduced relevant policies to promote the high-quality development of regional industries. Incomplete statistics are as follows:

Cartography: Institute of Financial Listed Companies Source: China Index Institute.

From the policy point of view, there are two significant changes: on the one hand, despite the continuous easing of overall liquidity, the central government has repeatedly reiterated that the real estate industry will not "loosen" the policy, resulting in the "real estate thinking" in industrial real estate has not been strengthened; On the other hand, the demand for "post-disaster revival" of local economy further integrates the economic development demands of industrial real estate operators and the government. In particular, the state has made it clear that in the economic recovery and construction after the epidemic, it is necessary to actively use emerging technologies to develop high-end industries, including "new infrastructure" industrial chains-5G, high-end equipment, new energy vehicles, aerospace, energy conservation and environmental protection, and new materials. And consumption upgrading areas such as emerging consumption and health care.

Actions of industrial real estate operators

It is in response to the economic recovery after the epidemic that the direction of policy encouragement points out how to solve the coordination problem with local governments. Therefore, it is very important for industrial real estate operators to look to the future and choose what kind of industry to lay out. In this regard, leading enterprises in the industry have taken action.

According to the summary of enterprise dynamics in the monthly report of industrial real estate market in June 5438+0 and February released by China Index Academy, from February 24th, 20 19 to February 27th, 2020, more than 60 production city projects have reached an agreement.

On February 25th, 65438, the Greenland Zhuzhou Binjiang Science and Technology Park project was officially launched. With the new urban renewal mode of "real estate+technology", Greenland will build a large-scale eco-technology industrial complex integrating headquarters economy, technology research and development, creative office and supporting services.

On October 9th, 65438/KLOC-0, Gemdale signed a strategic cooperation agreement with Shenyang Municipal Government, and planned to invest 29.8 billion yuan to transform and develop 9 production city projects in Shenyang, including Yuhong Intelligent Manufacturing Industrial Park, Gemdale Shenhe Cultural and Sports Center Project and Hunnan Intelligent Manufacturing Center Aviation Manufacturing Production Line Project.

On February 18, Greenland Group signed a strategic cooperation framework agreement with Yantai Municipal Government. The two sides intend to cooperate in three major projects: Yantai High-speed Railway South Station Intercity Space Station, Zhifu Happy New City Landmark and Muping District Convention and Exhibition Center, with a total investment of about 40 billion yuan.

On February 25th, GCL IC, a leading domestic enterprise in wafer recycling and mass production, signed a contract with Huaxia Happiness, with a total investment of 5 billion yuan and an annual output of 3.6 million recycled wafers settled in Feidong Industrial Town, Hefei.

On February 27th, Zhangjiang Science City held the signing ceremony of key projects. * * * There are 30 contracted projects and 20 started projects, involving innovative R&D platforms, integrated circuits, biomedicine, artificial intelligence, urban function improvement and other fields, with an investment of 36.4 billion yuan.

Judging from the recent industrial layout of the head enterprises in the above industries, words in new economic fields such as "artificial intelligence", "biomedicine", "fashion" and "health care" frequently appear. Combining with the relevant support policies of the central and local governments for new economic development, it can be seen that embracing the new economic model has gradually become the main theme of long-term changes in industrial real estate. Yu Dahai, senior vice president of Yida China, pointed out: "Pay attention to market opportunities in some emerging industries. Traditional industries have been hit hard by this epidemic, while emerging industries such as new generation information technology, intelligent manufacturing, unmanned distribution, online education and consumption, and telemedicine have shown strong growth potential. "

Competitiveness upgrade: competition has just begun.

To sum up, in the short term, the demands of local governments to strengthen local industrial economy will further dilute the "real estate core" in industrial real estate and promote it to a dominant position, which will help local governments and industrial real estate operators coordinate their goals; In the long run, emerging industries driven by the new economy will inject new vitality into industrial real estate.

Returning to the essence, only by defining the core of industrial development can industrial real estate have real core competitiveness.

It is undeniable that despite the support of policies, industrial real estate is still more difficult to develop and the competition is more intense than traditional real estate. Strictly speaking, there are two main types of industrial real estate developers. One is various national or local high-tech zone development institutions led by the government; The other is private enterprises, which participate in various industrial real estate projects in the form of enterprises. There are three main types of private enterprises developing industrial real estate. The first mode is to develop PPP mode. The second mode is the mode of industry+real estate, and its essence is the mode of industrial land purchase; The third mode is the product-oriented mode of returning to industrial development, that is, the industrial science park mode.

Under the background of policy environment and logical evolution of industrial real estate development, if industrial real estate wants to realize the transformation from high-speed growth to high-quality growth, the development prospect of using these three development models still needs to be tested by the market.

In this regard, Wu Dachuan said: "No matter which mode, industrial real estate must adhere to three core competitiveness. First, we should clearly choose our own development model, because each model has different requirements for site selection and negotiation with the government. Once the business model is selected, the enterprise will determine the requirements of site selection and the way to negotiate with the government. Second, to do industrial real estate, we must have industries first, give priority to the development of industries, have our own industrial development capabilities, or have the ability to attract investment and industrial integration. Third, the profitability and financing ability of enterprises must be very strong. The development of industrial real estate must have industrial feelings, and the return period is often very long. Whether it can withstand the pressure in the early stage is closely related to the financing ability. "

Only by clarifying the core competitiveness can the future development be more quality. Looking forward to the future, industrial real estate will focus on economic development, take the new economic model as the starting point, achieve mutual benefit and win-win with the government, get rid of all kinds of constraints of the traditional real estate industry, and realize real "upgrading and evolution".

Source: Institute of Financial Listed Companies.