Recently, Lingyu International has joined hands with Zijin Property Insurance, a well-known domestic insurance institution, and Xinhua Fengyu, a state-owned asset ** manager in Jiangsu Province, to jointly build a special project of 500 million yuan for rental housing, which is expected to increase the asset management scale by 2 billion yuan, and land the first project, Nanjing Hexi Affordable Rental Community.
This special project is not only the first long-term rental house led by Lingyu International, but also creates a precedent for domestic insurance funds to participate in the development of long-term rental apartments** and has a project landing. As early as the beginning of 2022, Lingyu sold all 30% of the equity of the "Shanghai Pujiang Overseas Chinese Town Yumi Community" project, becoming the first demonstration project in the field of rental housing to achieve the full cycle of 'investment, financing, construction, management and withdrawal' asset management, which is an important step for Lingyu International to become an expert in rental housing asset management. Up to now, Lingyu has successfully completed the exit of seven rental community projects.
What are the characteristics of Lingyu International that attract the favor of many investment institutions?Or, let's look at it from another angle, what kind of characteristics should be considered by investment institutions to be worth investing in?
part.01
What do investment institutions pay attention to?
Usually people think that to judge whether a company is worth investing in, it is necessary to analyze the financial fundamentals, such as profitability, solvency, cash flow, etc. In 2007, after the ESG concept was first proposed, more and more investment institutions began to pay attention to the ESG practices of the invested companies. In the eyes of investment institutions, a company worth investing in should not only pursue profits, but also have a sustainable sense of social responsibility, that is, more investment focus on ESG performance. The ESG performance of companies is now reflected in the form of ESG ratings or scores, and investors often use this as the basis for judgment.
According to the Sustainability Report released by the Global Sustainable Investment Alliance (GSIA), since 2014, the global ESG asset management scale has grown at an annual rate of 25%. Moreover, the world's major exchanges have also been deployed in ESG. For example, in 2014, the European Union issued guidelines requiring PIEs with more than 500 employees to disclose ESG information in their audited annual reportsIn December 2015, HKEX revised the Guidance on ESG Reporting to change the principle of ESG disclosure to "comply or explain" by issuing the Environmental, Social and Governance Reporting Guide in December 2011 to encourage listed companies to publish ESG reports on a voluntary basis.
Practicing ESG concepts has become the key for companies to attract investment institutions
part.02
Financial indicators + non-financial indicators = sustainable development of enterprises
Why does the practice of ESG have such a strong attraction to investment institutions?This starts with the relationship between ESG and corporate sustainability.
Investment is to make long-term stable and sustainable profits, and to judge whether the target company is worthy of investment, it is not only necessary to look at the financial performance of the enterprise, but also to pay attention to itNon-financial indicators such as the company's contribution to society and the environment, as well as the effectiveness of the company's internal governance。ESG is an analytical framework that helps to measure and quantify the non-financial indicators of a company and helps determine the degree of sustainable operation.
Drafting: ICCRA
Focusing on the housing rental industry, what we usually call asset management is actually a financial indicator, and its core is to look at the NOI rate. The impact of non-financial indicators on financial indicators is "moisturizing things silently". The formula in the figure below dissects this subtle effect:
Drafting: ICCRA
part.03
The practice of Lingyu International's core competitiveness in ESG
Back to the question at the beginning, what kind of characteristics does Lingyu International have that are favored by many investment institutions?
From the above formula, it is not difficult to see that in the housing rental industry, S-social issues have the highest impact on the NOI rate. This is due to the fact that the core of the rental industry is "people", and all business development is achieved around "people", and the largest external stakeholders are tenants. As a result, tenant satisfaction is a direct reflection of the effectiveness of a company's ESG practices.
In the community operated and managed by Lingyu International, the importance of tenants can be justifiedDetails of the "firsts" of the two industriesA glimpse of it.
Double insurance for safety management
Safety is related to the safety and health of everyone's life and the well-being of every family, and the implementation of the main responsibility of safety is the foundation for the safety, stability and development of housing rental enterprises that provide residential products. Especially in large-scale rental communities, with a large management scope, many management scenarios, and a large number of thousands of residents, safety management is the top priority.
Lingyu is the first in the industry to create a "community + headquarters" secondary security systemto minimize security risks from a preventive perspective. The secondary security is jointly responsible for security monitoring by the community and the headquarters of Lingyu, which is a "double insurance" for safety management. Deployed at the same time as civil air defense and technical defense in the community, all-weather security monitoring and regular patrols by security personnel;At the headquarters, there is also a special security department that directly connects to the safety supervision equipment of each community, and sticks to the safety line 24 hours a day with the community. At the same time, thousands of safety equipment in the entire community - smoke detectors, sprinklers, cameras, fire hydrants, power supply and distribution, etc., are connected to the security cloud built with huge investment, and technical means are used to ensure that equipment failures (such as fire hydrant water level) are found in time, so as to respond to any abnormalities in seconds, and ensure that problems are found and solved in time. The secondary security mechanism increases the safety hazard investigation rate from 73% to 96%, eliminating potential safety hazards in the bud.
**From: Lingyu International
Through the three-pronged approach of science and technology + humanities + high standards, Lingyu achieves safety management goals: 100% equipment integrity rate and 100% emergency response compliance rate.
A new experience for tenant autonomy
Safety and comfort are the basic conditions that attract people to rent. The key to retaining young people who live in large rental communities is to give them a sense of belonging and identity. This requires the operator to start from the needs and characteristics of the customer group, create a warm community, and strengthen the bond between tenants and communities, and between tenants and tenants.
On the basis of accurate customer research, Lingyu found that the community culture of the collaborative and autonomous model is more in line with the life attitude of young people who have ideas and do not blindly follow, so that tenant autonomy is more conducive to stimulating young people's sense of responsibility. That's why Lingyu was createdThe industry's first community management model of tenant autonomy and orderly participation, and has implemented three carriers: tenant autonomy committee, tenant covenant and community alliance.
Tenant Autonomous Committee - Lingyu organizes tenants to elect tenant committees by referendum, and communicates regularly with the operation and management party on behalf of tenants to promote the quality of community operation and managementThe Tenants Committee also undertakes the function of communication and coordination between tenants and between tenants and the apartment, resolving conflicts between tenants, publicizing community conventions, and promoting community construction.
Meetings of the Leasing Committee
**From: Lingyu International
Tenant Convention - In order to more effectively promote the realization of a harmonious atmosphere in the community, Lingyu entrusted the Tenant Autonomy Committee to formulate a tenant covenant that was agreed by both the community and the tenants, which advocated a positive code of conduct, standardized the requirements of civilized rental in the community, and was publicized and guided by the organizing committee to the tenants to consciously abide by it.
Community Alliances - It is an indisputable fact that young people's interests and hobbies are diverse, and if activities are organized to meet the hobbies of thousands of people in large community projects, there may be more than a dozen or even dozens of types of activities. This is an impossible task for the operations manager. The autonomy of the Tenancy Committee also provides ideas for the community to build itself. Lingyu adopts the strategy of "grasping the big and letting go of the small", focusing on the organization of some large-scale activities, such as ** meetings, street basketball games, etc. For small-scale and high-frequency activities, tenants spontaneously organize community clubs according to their personal preferences, such as night running groups, go-kart groups, badminton groups, etc. The store manager and housekeeper of the community form a community alliance with the heads of each club, standardize the process of establishing a club, clarify the organizational structure of the club alliance, coordinate the time and venue arrangement of club activities, etc., to ensure that each club can thrive and enrich the lives of young people.
This initiative has achieved remarkable results, and there are a total of 16 active associations in the pomelo community of Shanghai Pujiang OCT. The connection between people and the rental community is stronger, and the stable customer base has contributed to the project's 60% renewal rate.
Community Events
**From: Lingyu International
The above two details are only a small part of the analysis of the four core competencies of Lingyu International combined with ESG practices. It is not difficult to see that the company has not only applied ESG concepts to the development of the company, but also the efforts of these non-financial indicators have promoted the positive growth of financial indicators, which is not difficult to explain why the company is so attractive to investment institutions.
Lingyu International has also contributed many years of development experience to the industry, and participated in the formulation of two group standards, the "ESG Management System Requirements for the Accommodation Industry" and the "ESG Evaluation Guidelines for Accommodation Enterprises" led by the China Hotel Association. These two standards have united the certification center of the China Association for Quality, Beijing Uni Huasheng Hotel Management Consulting, the School of Hotel and Tourism Management of the Hong Kong Polytechnic University and other institutions and units.
**From: Lingyu International