It is estimated that urban renewal will contribute 7% - 8% to the growth rate of real estate investment and maintain the annual growth rate of real estate investment of 5.4%. It is estimated that the investment scale of urban renewal during the 14th Five Year Plan period will be more than 10-12 trillion, and the average annual investment scale during the period will be more than 2-2.5 trillion. Considering the strong demand for steady growth in 2022, there may be the characteristics of pre force in the 14th five year plan; If it is further estimated that the investment in real estate and infrastructure accounts for 70% and 30%, It is estimated that the contribution of urban renewal to the growth rate of real estate investment in the whole year is about 7% - 8% (according to the estimation of the current sample cities, the proportion of real estate investment in urban renewal is about 60%. With the further promotion to the third and fourth tier cities in the future, the proportion may be further increased to 70%. In the process of increasing the proportion, China's existing real estate enterprises, especially the real estate enterprises subordinate to the construction type central enterprises, will be an important source of increment. The urban investment platform is less and less controlled by the implicit debt. Please refer to the previous report for details How much real estate investment can urban renewal drive. As a strong variable of real estate investment in 2022, this paper further studies the implementation subject of urban renewal.
In the official documents, there is room for real estate enterprises and state-owned platforms to participate in the construction and investment of urban renewal
Urban renewal depends on the city's policies, and all provinces and cities have issued management measures according to the actual situation to implement the construction respectively. However, on the whole, they adhere to the characteristics of government guidance, increased government enterprise cooperation and active participation of market institutions. At present, there is room for access for real estate enterprises and state-owned platforms (including urban investment platforms, local state-owned enterprises and central enterprises) in local official documents, but local implementation methods are focused. Take some typical first and second tier cities as examples:
Tianjin supports the active participation of real estate enterprises, and encourages the participation of state-owned platforms for large-scale projects. The notice on the implementation plan for the transformation and upgrading of old houses and old communities in Tianjin and urban renewal clearly stipulates that "urban renewal fully mobilizes the participation of social capital through market-oriented operation": first, we "support professional institutions and other social forces to invest in and participate in various renewal and transformation projects". We believe that professional institutions in social forces are mainly real estate enterprises. Second, "major urban renewal projects involving long construction cycle, large investment scale, cross regional and municipal level can be implemented by powerful state-owned enterprises through government authorization". We believe that large-scale projects are mainly led and participated by urban investment platforms and local state-owned enterprises, and real estate enterprises can also participate in co construction.
Chongqing gives high implementation weight to state-owned enterprises or platforms in urban renewal. In the work plan for urban renewal of Chongqing issued by Chongqing, it is proposed that "all district and County People's governments and relevant state-owned enterprises shall scientifically determine the scope and specific contents of transformation and upgrading according to the scope and standards of transformation and upgrading, fully consider the conditions such as urban planning and capital guarantee, and incorporate them into the corresponding special planning and annual plan".
Guangzhou sets up different implementation entities for different project types, and real estate enterprises and state-owned entities can fully participate. For the old village reconstruction project, it can be constructed by the village collective economic organization or its wholly-owned subsidiary and publicly selected market subjects; For continuous reconstruction projects, the government collects and determines the reconstruction subject (land use right holder) through bidding. From the perspective of practical operation, many real estate enterprises participate; The old plant reconstruction project can be reconstructed by the original land owner or returned to the government and soil storage platform.
It is expected that the proportion of real estate enterprises participating in urban renewal will increase on the basis of 60%, and state-owned real estate enterprises are an important source of increment
According to the statistics of the central index, a large number of real estate enterprises have been arranged in the field of urban renewal. Guangdong Province has the most obvious first mover advantage in urban renewal. For example, taking some typical cities in Guangdong Province as an example, the average participation area of real estate enterprises in urban renewal exceeds 60%. Taking the planned announcement projects of urban renewal and old transformation in Shenzhen in 2021 as a sample and the area to be demolished as the statistical object, the business scope includes the total area of projects in the charge of real estate development enterprises, accounting for about 53%; This data accounts for 77% of the urban renewal in Guangzhou; In the urban renewal of Dongguan, this data accounts for 72%. In terms of the nature of enterprises, state-owned enterprises and private enterprises have both. Similarly, taking Shenzhen as an example, according to the statistics of the central index, a total of 21 real estate enterprises have participated in the urban renewal investment in Shenzhen, of which state-owned enterprises account for about 1 / 3, and private enterprises also have high enthusiasm for participation.
From the current development of urban renewal investment (including comprehensive consideration of specific investment, urban renewal planning and the establishment of urban renewal Fund), the first and second tier cities are still relatively important development main forces. For example, the 14th five year plan of Guangzhou clearly states that "the investment scale of urban renewal project during the 14th Five Year Plan period will reach 331.5 billion yuan"; Shanghai has set up a total of 90 billion urban renewal fund to support relevant construction. However, from the perspective of the current pilot scope of urban renewal, it basically covers all major regions of the country. Therefore, in the future, urban renewal may further expand from the first and second tier cities to the third and fourth tier cities. In the initial stage of the development of the third and fourth tier cities, it is more likely to form real estate investment by means of old community transformation and demolition. It is expected that the proportion of real estate investment in it may further increase to 70% in the future.
From the perspective of the types of real estate enterprises, we believe that the increase of urban renewal investment in the future mainly comes from state-owned real estate enterprises (including those subordinate to construction central enterprises and traditional state-owned real estate enterprises). Taking Shenzhen as an example, according to the data released by the industry information center of Shenzhen Urban Renewal Association, among the 10 real estate enterprises participating in the planning and approval of Shenzhen urban renewal projects in 2021, only three are state-owned enterprises, and the planned area accounts for 31%. It is expected that this proportion will further increase in the future. It is expected that the state-owned real estate enterprises, especially the real estate enterprises subordinate to the construction central enterprises, will be the main incremental source of urban renewal investment in the future.
Urban investment platforms and construction central enterprises also participate in urban renewal and construction, and some projects are jointly built with real estate enterprises
From the perspective of practical operation, urban investment platforms and construction central enterprises also actively participate in urban renewal and construction, and it is a more common mode to cooperate with local real estate enterprises. In terms of construction central enterprises, taking China State Construction Engineering Corporation Limited(601668) , China Communications Construction Company Limited(601800) , China Railway Construction Corporation Limited(601186) , Metallurgical Corporation Of China Ltd(601618) , Metallurgical Corporation Of China Ltd(601618) as an example, the total scale of new urban renewal orders (including engineering and investment orders) in 2021 exceeded 400 billion yuan. From the perspective of practical cases, for example, China Railway Construction Corporation Limited(601186) and Luoyang Fuhe District People's government signed an agreement, and the investment group under China Railway Construction Corporation Limited(601186) and the fifth Railway Institute jointly completed the investment and construction of the old city reconstruction project in Fuhe district with Luoyang Chengzhu Industrial Development Co., Ltd. (local state-owned real estate enterprise) China Communications Construction Company Limited(601800) subsidiary CCCC urban investment, together with China real estate group and Yunyan City, participated in the urban renewal project of Renmin Avenue (Yunyan section) in Guiyang. In terms of urban investment, there are also cases of direct participation in urban renewal and construction, but in the future, restricted by implicit debt control, it is expected that there will be fewer and fewer forms of direct participation. For example, Zhuhai hi tech Construction Investment Co., Ltd. cooperates with the village collective to carry out the reconstruction and construction of Gangwan No. 1 science and Innovation Park in Zhuhai, Guangdong Province; Fuxing Huiyu, a real estate enterprise, cooperates with Guangzhou Development Zone Investment Group to carry out urban renewal and transformation; CCCC urban investment mentioned above is also an important example of urban investment platform participating in urban renewal. The participation of the urban investment platform can further leverage the special debt to enter the field of urban renewal. For example, in the Chongqing urban renewal work plan, it is proposed to "make full use of the special fund of the central government for urban affordable housing projects and other policy funds, and explore the use of more national policy loans for urban renewal projects through special debt and other means".
Risk warning: the sample of urban renewal enterprises in some cities has deviation from that in the whole country; Investment in urban renewal is less than expected.
