On January 20, 2019, the "industry-city integration and innovation summit & the 5th China real estate huabao award ceremony" was successfully held in the great hall of the people hotel in Beijing. Leaders of brand real estate enterprises and real estate finance experts gathered together and had in-depth dialogue and discussion on the three key words of "real estate transformation, innovation and reconstruction". Mr. Denny Tam, President of K&G, was invited to attend the event and gave a keynote speech on "what urban renewal should do & how developers should embrace the new era of existing real estate".
The development of Chinese cities, especially first-tier cities, has entered an era of stock renewal, and urban renewal has become a new starting point for urban development. Facing this trillion-level market, brand real estate enterprises are actively expanding market opportunities and setting off a upsurge of urban renewal.
Urban renewal fever surges in 2018
On BBS, Denny Tam Shared two sets of data: in March 2018, the baidu search index for the term "city update" was 5.6 million, but from September to the end of the year, the number of searches for the keyword "city update" on baidu doubled to 11.2 million. Another set of data: in February 2015, guangzhou city renewal bureau was established; In September 2015, shenzhen city renewal bureau was established. In June 2016, jinan city set up the urban renewal bureau. In November 2017, dongguan city set up an urban renewal bureau. In January 2019, the urban renewal bureau of zhongshan city was established. In January 2019, zhanjiang city set up the urban renewal bureau.
At the same time, half of the brand real estate enterprises have participated in the urban renewal field, the cooperation and merger and acquisition are accelerating, and the financial withdrawal mechanism has taken shape. There are three main ways for developers to participate in urban renewal -- independent operation, merger and acquisition and cooperative operation. Kaisa mainly operates independently and strengthens the brand connotation of urban renewal by setting up more than 200 professional companies. Zhongnan, xuhui and longguang mainly focus on merger and acquisition. Country garden, Olympic garden, midea real estate and other major forms of cooperation to participate in the establishment of platform companies; Gaohe capital realized the urban renewal fund through the first single urban renewal REITs in China -- "the special asset support plan of gaohe urban renewal equity fangtuo no.1", and the complete closed loop for investors to exit the REITs through private placement in stock exchanges.
Why are developers making these changes? According to Denny Tam, the 731 political bureau meeting has become an inflection point for the real estate industry. Everyone used to believe that the real estate industry had a bright future. Coupled with the shortage of land resources, the development path is shrinking, developers are also trying to "live". At this time, "urban renewal", which is highly concerned by the government, may be a way that suits the favorable conditions and conditions, which also accelerates the outbreak of "urban renewal" popularity.
How to understand urban renewal?
There is no doubt that the urban renewal market is a big cake for developers, governments and property owners. We are all concerned about urban renewal, but the vast majority of people do not understand what urban renewal is, including those who are doing it, and even many local governments have only a partial understanding of urban renewal.
Denny Tam says that in the past year he has often been asked: "what exactly is urban renewal?" "And" what does urban renewal do to make money?" .
Urban renewal is a fast and systematic renewal iteration of various functional areas in a city. The development of urban economy and the change of political positioning will surely lead the city to develop and iterate towards a higher level. Take shenzhen as an example. It used to be a special economic zone. Its political mission is to serve as a model of reform and opening up for domestic cities. Now, shenzhen is an international modern city that targets Hong Kong. It takes the financial industry, Internet and high-tech industries as its pillar industries. The key words are science and technology, innovation, culture and consumption. The change of economic, political and social factors leads to urban renewal. But what does this urban renewal have to do with real estate developers?
Developers make hardware, and the numerous buildings in the city are "containers" for various human life and activities. If the hardware you build is not suitable for the needs of the content, the hardware is worthless. For some cities, there is now a lot of hardware that has become junk and needs to be adjusted to fit the content needs. That is why we say that what urban renewal really carries is the transformation of urban functions, the adjustment of population structure, the transformation of industries, the upgrading of consumption, and the overall improvement of urban infrastructure and public services. If you don't understand the underlying logic, it's hard to make money in urban renewal projects.
How to do urban renewal?
If the meaning of urban renewal is hardware to adapt to content. Through the transformation of the existing entities, we can adapt to and guide the urban industrial transformation, consumption upgrading and quality of life improvement. So when updating the hardware, how to understand the needs of the city has become the most important subject of urban renewal. The reason why the hardware needs to be updated is that it can't adapt to the needs of urban development. Therefore, it is the most important thing to study the needs of urban development and residents.
But this is precisely the most difficult, because it is a test of operation, test your understanding of the depth of the city, test you for the urban renewal project you operate within 10 kilometers of the residents living state, life and work trajectory, psychological needs of a deep understanding of a thing. What's more, this means that urban renewal projects are not the subject matter, and the standard, large-scale and fast-turnover real estate development may not be applicable.
Feng lun said that the post-development era has three characteristics: first, the full product line; Second, the whole value chain; Third, the all-business model. In fact, we correspond to the industry trend, the three characteristics have been very obvious. With its full product line, vanke has entered the fields of housing, commerce, logistics and warehousing, ice and snow vacation, old-age care and education. The whole value chain, the value chain of making money from buying land to finance, such as doing an office building rental, after the rental can be realized through REITs, assets can flow through finance; Full business model, can make money is not only development, co-working, long lease apartment, real estate fund, more and more innovative business model is emerging, there are opportunities to make money.
K&G is the first urban renewal resource platform
No matter how the form and content of cities have changed, their nature of serving people's life will not change. According to Denny Tam, K&G has taken a unique platform path in the field of urban renewal, which is to build a collaborative platform for urban renewal, that is, to provide the city government with all-round solutions in the mode of "platform + think tank + technology + capital + industry + operation".
Not all housing enterprises can be like vanke, set foot in the full product line, operation of the full value chain. But by KaiHui gold build collaborative platform, developers, financial institutions, operations, strategic consultancy, industry enterprises are gathered up, developers have a project, land consolidation, the advantage of building, financial institutions have financial advantage, operations have professional operation ability, strategy consultants have planning ability, as well as industry enterprises, like China resources and joint with millet, finalise the import industry before the project update.
The core of this collaborative platform is in the following three aspects:
(1) fair and objective, catering to the needs of the government
The city is an ecosystem, and urban renewal has its integrity. The government needs a platform for urban renewal investment and development to match the diversified needs of its urban renewal, and to help it solve the problem of balancing the interests of the government, enterprises and the public.
(2) resource stack breaks the boundary restrictions
Enterprise does not have advantage on urban renewal operation, but also impossible to dabble in the whole industrial chain, so need KaiHui gold resources such platform to break the boundary constraints, the developers, financial institutions, operations, strategic consultancy, industry, according to for their advantages such as polymerization, resources, to maximize the efficiency and effectiveness of urban renewal.
(3) risk diversification is conducive to the expansion of scale
Real estate enterprises through the heavy asset acquisition operation project expansion speed is slow, the risk is not easy to disperse. Through the kaihui gaode platform, the matching actions of capital, industry and operation end can be completed quickly, efficiently and accurately on the platform, and the scale expansion of existing real estate can be expanded with lower cost, faster speed and lower risk.
One of the founders of Google, larry page, said it was becoming clear that the most important function of the future organization was empowerment. It is not hard to find that what K&G is trying to build is an urban renewal enabling ecology. By setting up an investment and operation system for local governments to invest in urban renewal and establishing a financial platform and industrial incubator, K&G will help the city grow more gracefully.