In 2021, China’s real estate enterprises, which had made rapid progress all the way, encountered the capital chain test on a large scale for the first time. In the face of this challenge, how will real estate enterprises seek solutions and how will they study and judge the new year?
Surging news exclusively interviewed a number of senior executives of China’s leading real estate enterprises, trying to seek the future development of China’s real estate market from their eyes.
Recently, surging news interviewed Wang Ying, executive director and CEO of Ruian Real Estate Co., Ltd. (Ruian real estate, 00272. HK).
Wang Ying has joined Ruian real estate for nearly 26 years. On December 30 last year, Ruian real estate announced that Wang Ying, the former managing director of Ruian Management (Shanghai) Co., Ltd., was appointed as the executive director and CEO of Ruian real estate, fully responsible for the management and operation of the group, promoting the strategic growth of the company’s projects, and implementing the corporate strategy of the board of directors.
In Wang Ying’s view, the whole real estate market in 2021 has experienced relatively large ups and downs in the first and second half of the year and the severe test of subsequent regulatory policies. In 2022, the positioning of “house is for living, not for speculation” will remain a firm general direction. “Implementing policies for the city” will be further implemented to promote the virtuous cycle and healthy development of the real estate industry, and the real estate market will maintain an overall stable operation.
Wang Ying said that in 2022, Ruian real estate will continue to focus on the planning and development of large-scale comprehensive purpose communities and properties; Continue to focus on Shanghai business and expand strategically to high growth cities, and selectively expand in other leading and high growth cities in the Yangtze River Delta and Dawan district.
Up to now, Ruian real estate has not disclosed the annual report of 2021. However, according to the property sales briefing for the fourth quarter ended December 31, 2021 previously released by Ruian real estate, the cumulative contract property sales of Ruian real estate reached 30.27 billion yuan in 2021, up 43% year-on-year. According to the semi annual report of Ruian real estate, the profit will be restored in the first half of 2021. Among them, 73% of Ruian real estate’s 1.57 billion yuan rent and related income in the first half of 2021 came from the property portfolio in Shanghai, and the rest came from other cities in China.
Wang Ying pointed out that Shanghai is the strategic focus of Ruian real estate. The company also believes that central cities such as Wuhan and high growth cities such as the Yangtze River Delta and Dawan district still have great potential.
the following is the record of the dialogue between surging news and Wang Ying:
surging news: what do you think of the mainland land market and housing market in 2022?
Wang Ying: in 2021, the whole real estate market experienced great ups and downs in the first and second half of the year and the severe test of subsequent regulatory policies.
Looking forward to 2022, the positioning of “house is for living, not for speculation” will remain a firm general direction. In recent years, we have seen that the real estate industry has changed from high-speed development to high-quality development, and extensive development to fine development. With the continuous improvement of the long-term mechanism of real estate, the “policy for the city” will be further implemented to promote the virtuous cycle and healthy development of the real estate industry. The policy regulation mechanism of land and real estate market will be more perfect and accurate, and the real estate market will maintain an overall stable operation. Under the background that “high-quality development” has become the main theme of the current real estate industry, real estate enterprises with relatively stable financial situation and excellent product quality will get more development opportunities.
surging news: in the two years since the epidemic, in the face of market changes, what strategies has the company adopted to promote business development?
Wang Ying: as early as 2016, facing the complex global economic environment and the increasingly competitive market environment in China, we have begun to implement the asset light strategy to strengthen our asset status. As of June 30, 2021, the company’s net asset liability ratio remained at 45%, at a very stable level. Although the real estate market is full of challenges in 2021, we are pleased to achieve steady property sales performance in the fourth quarter and the whole year – in 2021, the group’s cumulative contract property sales increased by 43% year-on-year, reaching 30.270 billion yuan, including 30.157 billion yuan of residential property contract sales and 113 million yuan of commercial property contract sales.
In terms of commercial real estate, in 2021, Ruihong Tiandi Sun Palace, the last part of the commercial axis of Ruihong new town, opened in September. With the positioning of “North Shanghai Life Center” and a large commercial volume of 180000 square meters, it gathered 30% of the first stores in Shanghai, 40% of the first stores in North Shanghai and 70% of the first stores in Hongkou to meet the escalating consumer demand, In line with the world-class planning and upgrading of the North Bund sector and the development goal of building Shanghai into an international consumption center city. During the three-day opening period, the sun palace has more than 1 million visitors.
In terms of office real estate, at present, Ryan office manages nearly 2 million square meters of urban core office projects nationwide, providing services to more than 1100 well-known enterprises at home and abroad.
surging news: what is the development idea of the company in 2022? What are the new challenges?
Wang Ying: Ruian real estate will continue to focus on the planning and development of large-scale comprehensive purpose communities and properties, and bring the successful experience and innovative practice accumulated in the process of urban renewal and the whole community life cycle development over the past 20 years to more cities and customers.
We will continue to focus on our business in Shanghai and strategically expand to high growth cities, and selectively expand in other leading and high growth cities in the Yangtze River Delta and Dawan district. Our reserve commercial properties are located in high growth cities such as Shanghai and Wuhan, which have strong economic prospects, large population inflows and are located in the center of China’s megalopolis.
At the same time, we will maintain a high level of financial discipline and financial flexibility. We will be committed to promoting the diversification of capital sources, especially increasing our financing in green and sustainable development, optimizing our capital sources by maintaining a stable asset position and various ways, maintaining financial flexibility and adhering to prudent and rigorous financial management, so as to help the group be ready to better grasp new business growth and market investment opportunities.
surging news: what is the company’s project strategic layout in 2022? Are there any promising regions or cities that want to enter the development stage?
Wang Ying: at present, the real estate market is in a period of adjustment. A series of government regulation measures help the market develop in a healthier and more rational direction.
Ruian real estate has implemented the asset light strategy over the past years to enhance the group’s financial strength, which helps the group better resist the risks brought by market uncertainties and grasp investment opportunities in a timely manner. We have always been aware of the opportunity to acquire land and explore the market in depth, and actively participate in land investment or expand new business with a cautious attitude. In December 2021, we and Wuhan Urban Construction Group jointly obtained the land for the Wuchang Bay project. The plot is located in the ancient city of Wuchang in Wuhan, facing the Yangtze River in the west, the second ring road in the south, and only 1.5km away from the Yellow Crane Tower. The project will deeply explore the cultural value of the ancient city of Wuchang for thousands of years and the value of century old industrial sites, aiming to build a world-class Yangtze River waterfront for Wuhan, Build the most international comprehensive community in Wuhan.
Shanghai is the focus of our strategy. We also believe that central cities such as Wuhan and high growth cities such as the Yangtze River Delta and Dawan district still have great potential. We will use our advantages and experience to seize investment opportunities.
