There are new measures to resolve real estate risks.
on January 26, the Chinese reporter of securities times and securities companies verified from various parties that the financial regulatory authorities recently convened several national financial asset management companies (AMC) to study AMC’s participation in asset disposal, Project M & A and related financial intermediary services of venture real estate enterprises in accordance with the principles of marketization and rule of law.
recently, there have been frequent news of the financing recovery of real estate enterprises. on January 26, Jianfa real estate and China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) real estate enterprises issued merger and acquisition notes in the inter-bank market respectively, and Jianfa real estate raised 1 billion yuan, of which 460 million yuan was used to acquire the equity of two target real estate project companies; China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) the amount of medium-term notes issued this time is 1.29 billion yuan, and the raised funds are fully used for Real Estate Project M & A.
On the same day, Huarun official WeChat official account released that the company and its Vientiane life signed the merger and acquisition financing strategy cooperation agreement with China Merchants Bank Co.Ltd(600036) in Shenzhen respectively. China Merchants Bank Co.Ltd(600036) will grant Huarun 20 billion yuan and Huarun Vientiane 3 billion yuan in the amount of acquisition financing respectively. Business types include but are not limited to M & A loans, M & a funds, asset securitization, and various financing products innovated based on the needs of M & a related businesses.
On the 26th, China Evergrande announced that the company is promoting auditors to carry out relevant work, and will continue to carefully listen to the opinions and suggestions of creditors and strive to put forward a preliminary restructuring plan in the next six months.
the good news on financing of real estate enterprises released centrally helps to steadily improve market expectations. market participants pointed out that recently, the reasonable capital needs of real estate enterprises are gradually being met, and the market expectation has improved steadily, which will help reduce the capital pressure of real estate enterprises, improve the operation capacity of enterprises, ensure the smooth completion of the project, implement the requirements of ensuring the delivery of buildings, people’s livelihood and stability, and promote the healthy development and virtuous cycle of the real estate industry.
However, some analysts believe that stabilizing growth is imminent and that stabilizing land and property should become a top priority. The focus of stabilizing real estate may lie in the deregulation of developers’ financing, and the restriction on house purchase demand may also be adjusted, but it is still due to the implementation of urban policies, and it is expected that more stable real estate policies will be introduced in the future.
national AMC participates in the overall rescue of risky real estate enterprises
One or four AMC people told the China reporter of Securities Times securities firm that AMC had rich experience in dealing with non-performing real estate assets in the past. If it participated in asset disposal, Project M & A and other businesses of venture real estate enterprises, it is expected to start from the perspective of overall rescue. However, only with the limited amount of real estate assets invested by AMC and the consideration of asset concentration risk, AMC also has, AMC is also expected to participate together with industrial capital.
Another four AMC executives told reporters that from the perspective of AMC’s investment in the business of collecting the assets of house purchase enterprises, if the discount of the asset object is appropriate, there is still a lot of room for AMC to acquire, and AMC will still evaluate the value of the asset object according to the principle of marketization.
Since the end of last year, the financial regulatory authorities have frequently released policy signals to correct the real estate financial policy and strive to improve the financing environment of real estate enterprises. At the recent annual working meeting of the central bank and the China Banking and Insurance Regulatory Commission, the two regulatory authorities listed “promoting the virtuous cycle and healthy development of the real estate industry” as one of the key tasks of this year.
The central bank said it would steadily implement the prudent management system of real estate finance, better meet the reasonable housing needs of home buyers, and promote the virtuous circle and healthy development of the real estate industry. The cbcirc said that we should adhere to the positioning that houses are used for living rather than speculation, and continue to improve the long-term mechanism of “stabilizing land prices, house prices and expectations”, so as to promote the virtuous circle and healthy development of the real estate industry.
expert: the adjustment of real estate policy is expected to gradually land from weak to strong in the first half of the year
at present, many real estate enterprises are stabilizing their cash flow by increasing revenue and reducing expenditure. On the one hand, they raise funds everywhere by selling assets; On the other hand, it will slow down the pace of development investment and reduce expenditure. In 2021, the annual growth rate of real estate development investment was 4.4%, the new construction area of houses in China decreased by more than 11% year-on-year, and the absolute scale fell to the lowest level since 2018.
Looking forward to 2022, the market generally believes that it is difficult for real estate development investment to rebound significantly. Chen Wenjing, deputy director of research of China Index Institute, believes that the new construction area of houses is difficult to change significantly in 2022, and the decline trend may continue throughout the year. The reasons are as follows: on the one hand, the national land transaction volume will shrink significantly in 2021, which will have a great impact on the scale of new construction this year; On the other hand, the capital pressure of enterprises will not decrease in 2022, the annual commercial housing sales scale is expected to fall, and the commencement of enterprises is also limited.
Recently, the China financial risk report 2021 jointly released by the National Laboratory for finance and development (nifd) of the Chinese Academy of Social Sciences and the Institute of finance of the Chinese Academy of Social Sciences pointed out that the real estate market, the debt of local financing platforms and the risks of small and medium-sized financial institutions may constitute the core variables of China’s systemic financial risks, Overall and structural policy responses are the key guarantee for China’s financial stability.
Changjiang Securities Company Limited(000783) Wu Ge, chief economist, believes that stabilizing growth is imminent, and stabilizing land production should become a top priority. Whether real estate can be stabilized or not is the most important main line of China’s macro-economy this year. The focus of stabilizing real estate may be the deregulation of developers’ financing, and the restriction on house purchase demand may also be adjusted, but it is still due to urban implementation.
“Facing the grim situation of steady growth, the adjustment of real estate policies is expected to be implemented successively in the first half of the year, and the strength may be from weak to strong.” Wu Ge said that this is not necessarily contradictory to the tone of “no speculation in real estate”, “no real estate as a short-term means to stimulate the economy”, but to correct its sales and investment to the track of “virtuous circle and healthy development of real estate” with positive growth rate. Before the real estate stabilizes significantly, infrastructure investment will bear the important task of maintaining stability.
However, Li Yang, member of the Academy of Social Sciences and President of nifd, believes that the current real estate market has crossed the trend inflection point. House prices have risen in fluctuations for many years before, and the corresponding real estate regulation policies are to deal with the rapid rise of house prices; However, the real estate market has entered an inflection point in the past two years. Since then, house prices in some areas are likely to decline in fluctuations
