Vanke Property To Set Up A Joint Venture Company.

The housing development of Chinese developers peaked in 2019, and competition in other stock areas also became hot.

One of them is property services. Since last July when they joined DTZ, in December 12th, Vanke dropped another bomb in the field of property competition.

Vanke property and DTZ join hands again. The two sides will invest in the establishment of a joint venture to focus on the commercial property and facilities management services in the Chinese market. The goal is to build asset management leaders.

Under the background of tightened policy of real estate control and incremental transfer of stock market, property sector is becoming one of the key tracks of housing companies switching.

Build asset management aircraft carrier

"This cooperation is more merge (integration, merger, editor's note), see the seats of the board can basically be seen." Zhu Baoquan, CEO of Vanke Group and CEO of property group.

This cooperation can be traced back to last year. In July 2018, Vanke property purchased a 4.9% stake in Dead Leung Ban in the form of IPO pricing. A month later, Dead Leung Ban was listed on the NYSE successfully, and Vanke property became its fourth strategic shareholder.

After that, the top leaders of the two sides met in Hongkong and Chicago, and reached a consensus until August 2019.

Zhu Baoquan revealed that the negotiations lasted for more than 1 years, and the two companies had different financial language, such as the difference between the system of payment and the payment system.

The management of new company is from the two teams. Ye Shiyuan, head of DTZ's Greater China Asset Service Department, is CEO, and Mo Fan, the managing partner of the former Vanke property enterprise business service division, is Mo Fan. Equity, according to Zhu Baoquan, Vanke property is in a controlling position.

The joint venture will be composed of assets from both shareholders. The business will focus on commercial property and facilities management, and use the two brands of Vanke property and DTZ. Next year, a new brand may also be established. Zhu Baoquan said that asset packs are customers of the original services of both sides, mainly commercial customers, excluding state-owned enterprises and the government.

It is worth mentioning that Zhu Baoquan thinks that the scale of commercial property is no longer calculated in terms of square meters, but according to contracts and customers, he said: "historically, in the country, we have seen property management, more in terms of their own perspective, how many square meters I have and how many projects there are. But from an international perspective, it is more about how many customers are served, including the number of customers.

As one of the five major industries, DTZ, despite its early entry into the Chinese market and the advantage of high-end international brands, as China's local property leaders continue to expand, DTZ also has to consider the way to break up its value-added business in China. Zhu Baoquan said: "mainly in the deep excavation of Chinese customers, they have made more foreign customers and Hongkong customers in history, but today, the development of Chinese customers may be faster."

Commercial property management is not an advantage for Vanke property in deep ploughing. "Even if everything business is developing very well, the brand image of Vanke property is still residential." Zhu Baoquan said that the five industries have been occupying the high point of service providers. If they cooperate, the Vanke property that has been deeply ploughing the housing can get the brand synergy effect and bring more quality customers and project resources.

As early as 2015, Vanke's pace in the field of business and property services has been stepped forward. Now Internet BAT three giants, Jingdong, China Mobile, China Unicom and other large volume enterprises are their customers.

In October 2018, Vanke property was also independent of the "all business enterprises" sub brand, specializing in business and business services. By the end of 2018, there were 635 projects in all business enterprises, with a total management area of 39 million 740 thousand square meters.

Zhu Baoquan recalled that when we first started bidding (Facilities Management), the value of our bid was several times that of others. Vanke did not have such a supporting asset service as leasing or bulk trading before making office property management.

On the contrary, they have been working hard in this field.

This cooperation is far more than brand synergy. "First of all, in terms of facilities management, we will not say that you do not understand it. Two, there is such a shareholder behind the block trading and leasing, which can provide services synchronously. Three, international customers can come directly to China when they come to China." Zhu Baoquan said.

Property tycoons looming

In the era of real estate stock competition, property services have been divested into independent businesses, whether leading housing enterprises or small and medium-sized Housing enterprises, and the industry as a whole has already entered the stage of merger and integration.

With the Matthew effect showing, the concentration of the property sector has been further improved, and the deep cooperation between Vanke property and DTZ has deepened this process.

At present, the competition pattern of property services has been initially established, and several big tycoons are already emerging. Besides Vanke property, they are eyeing each other, such as colorful life platform, country garden service, poly property, investment property and so on.

On the scale of the industry, financial reports show that Vanke income is ranked first in the industry, followed by Greentown service, AVIC, BB garden and poly property. The total income of five enterprises in 2018 is 9 billion 800 million, 6 billion 700 million, 6 billion 400 million, 4 billion 700 million and 4 billion 200 million respectively.

In terms of business type, every enterprise is seeking to expand from residential business to business, extending from community to urban services, affecting urban agglomeration and metropolitan area.

Since its listing in August last year, its service has been expanding, focusing on urban services and frequent mergers and acquisitions. It will take Beijing Shengshi, Chengdu Jiaxiang, Chengdu Tsinghua Yi house, Nanchang Jie Jia, Shanghai Ruijing industrial income capsule, and also to buy 100% stake in China Evergrande's Katai city property.

As the leading property of the central enterprises of the national team, Baoli property not only has the advantage of the parent company Poly Real estate, but also has a continuous increase in the management area ratio from the third party developers. In August this year, the IPO application was submitted to the HKEx, and the concept of "big property" was put forward, and the ambition to expand the business type was obvious.

In April of this year, there was a strong capital background for the acquisition of 22.35% stake in China Airlines, and then the investment property transferred 100% stake to China Airlines.

Compared with other peers, the quality of Vanke property is even more prominent. It is estimated that this year's revenue is over 10 billion, and it is the only property company with a revenue of ten billion.

2019 semi annual data show that in the first half of this year, Vanke property achieved a revenue of 5 billion 280 million yuan, an increase of 27.1% over the same period last year. New projects signed saturation income of 2 billion 164 million yuan, an increase of 113.8% over the same period, of which 1 billion 333 million of residential business services, an increase of 84% over the same period, accounting for 831 million yuan of commercial property services, an increase of 189% over the same period last year, and the proportion of business income from residential businesses to business enterprises was about 2:1.

According to Zhu Baoquan disclosed, Vanke property hopes that the next two formats can account for 1:1.

From residential property to commercial property and even urban agglomerations, Vanke expands its business boundaries on the track of property services.

Listing and financing become a part of competition. Biguiyuan services, Zhonghai properties, merchants Shanda, Greentown services, Jia Zhao property, and colorful life have all been listed, widening the financing channels, and purchasing more small and medium-sized property companies with stronger capital reserves.

In the face of competitors' listing and mergers and acquisitions, Vanke property at this time joined hands with DTZ.

Vanke chairman Yu Liang said that Vanke property will not be listed on a traditional property company. "We must be different from traditional properties and be recognized as city service providers." (Editor: Lu Yu)