It would not come as a surprise that Pan Shiyi sold SOHO China, after all, he has been selling for several years and is a company whose profit margins are decreasing every year, but it is curious why Blackstone is the only company willing to take over SOHO since 2019. Why is a hot potato in the eyes of others a high-quality asset in the eyes of Americans? In addition, among the top 10 real estate companies in China in recent years, which one is not overwhelmed by debt and is reducing projects, but American companies are making a big push for first-class special-purpose land projects in China, what can we ordinary people learn from it?
Whether you like it or not, Pan Shiyi is a smart choice for a person who came out of rural Gansu and was able to meet a Wall Street elite like Zhang Xin by relying on his own hard work, and married home by virtue of his personality charm, and as the first to go to sea, he wisely chose real estate, the most promising business track in Chinese history. With such a keen business acumen, we should at least study his philosophy.
In the past 20 years, China's economy has developed rapidly, and the easiest way to increase GDP is real estate. However, now that the state has repeatedly emphasized the dominant idea of housing for living in, not for speculation, what we can do is not only to resolutely support the country's policy, but also to study the direction of development more intelligently. Learn how some of the world's smartest capitals and companies do it.
Insert a sentence here to explain to new friends that this is an article for everyone to gain insight into business changes, share investment experience, and always see the essence through events. Because I don't like to be inflammatory, my views are not the same as those of the public, and the articles often touch on other people's business truths. So usually the traffic is not too high, so you brush is earned, it is strongly recommended that you like and follow first, so as not to get lost, old fans can leave a message in the comment area. So let's get down to the point, let me first tell you two factual conclusions.
First, U.S. capital has been aggressively developing China's logistics industrial parks since 2018, and Blackstone has taken control of the largest logistics park in the Guangdong-Hong Kong-Macao Greater Bay Area.
The second conclusion coefficient is that among the top 10 real estate companies in China, only Dalian Wanda and SOHO China have made large-scale asset transfers. Wang Jianlin and Pan Shiyi seem to have to sell their assets for various reasons and go downhill, but in fact, their assets can find a home precisely because their assets are still valuable, and they will be better than other real estate companies that only develop residential buildings for many years to come.
Looking at Evergrande's thunderstorm, do you think Country Garden, Huaxia Fortune, and Evergrande don't want to sell their assets? They are already the largest real estate companies in China, who can swallow the companies that can take over in China? What about foreign investment? Blackstone began to talk about the 4 billion sale in 2019, China spent 1 billion less after a year, becoming 3 billion, and the acquisition has to be lowered, and now the traditional real estate company will not take over if it does not suppress the price of cabbage swallowed in the stomach, foreign capital will not take over, so in essence, it is not as good as the assets of SOHO and Wanda. Whether it's Blackstone's logistics park or Asia's largest real estate deal, SOHO China has given us an important signal that in the future, private housing may be reduced to the lowest type of property market in the mainland.
In 2018, the American Blackstone Group reached 12US$500 million acquisition of VivoCity, a shopping mall in Shanghai, and then a takeover of Xi'an Cityport Shopping Center in Zhengzhou. In 2019, Blackstone bought more than 20 billion yuan worth of commercial real estate in China. In October 2020, Blackstone launched the acquisition plan for R&F Properties' Guangzhou International Airport R&F Integrated Logistics Park project, and officially signed an agreement in January 2021 with a total transaction price of US$1.1 billion. In the relationship of time, I listed the M&A plan of a foreign-funded company in Blackstone, and I will not talk about other foreign companies such as Warburg Pincus in the United States and foreign capital in Singapore.
I would like to tell you a key point here, all of Blackstone's investments in China are concerned about one indicator, cash flow, cash flow of rentable units, which is enough to attract the attention of every ordinary person. I can share with you my personal experience, real and valuable investment stories, although it does not constitute advice, but I hope it will inspire you. In developed countries in Europe and the United States, when professional institutions invest in real estate, the first thing to consider is whether there can be long-term stable land appreciation and rental returns, these two factors must be met at the same time, which is why foreign investors now rarely consider buying residential real estate in China.
Take first-tier cities such as Beijing and Shanghai as examples, everyone has estimated that even if it is a 10 million-level house, the rental income is more than 10,000 yuan per month. The total price of some old and dilapidated houses is very expensive, but the monthly rent is very low, and it can only be repaid until sixty or seventy years. If you follow this rental rate of return, it is not as high as the fixed interest rate of depositing money in the bank. In the past, some houses did not need to be rented out during the period when housing prices were ** year by year, so it didn't matter to the landlord how low the rent was. But this is an unhealthy market, the purpose of the house is to make people live or company office land, if the house price can not maintain rapid growth, then whether it can be rented out and whether it can be quickly realized is a problem. Even if it's not good, you can use the money tomorrow to sell it today, even if you cut the meat and sell it, you can realize it, but is the house okay?
Pan Shiyi's huge fixed assets, if they are sold out normally by real estate transfer, the audit will take one or two years, and the procedures that can actually be completed in the transaction will not be completed in three or five years. Blackstone's main business is the private placement of fixed assets. They have a method of realising and transferring equity to complete the transaction so quickly. For our ordinary homeowners, or young people who want to invest in real estate in the future, I will give you an example, how do smart investors do it?
Everyone should remember that in 2018, a first-line female star in the mainland paid 800 million in taxes, this money is cash, is she relying on the savings of her acting career? In fact, it is largely due to her long-term investment in a large number of student apartments in Canada for a long time, which has ensured her a steady stream of cash flow in her life. This actress was originally keen on buying a house in the mainland, and later chatted with a friend Zhang Li in the circle, who was the actor of the 87 version of Baochai in Dream of Red Mansions, Zhang Li went to Canada to study in the early years, although she didn't act anymore, but she also relied on being a real estate agent in Canada, and she was easily financially free. She told the big star to buy a building near the university and convert it into a student apartment. The actress wanted to try it first at the beginning, and spent 270,000 Canadian dollars to buy a very old villa, which was renovated into a three-story nine-room family hotel. The first floor was rented to an immigration company called Kuaike, and the two sides worked together to arrange all the new immigrants to this woman's hotel, so it was always full. The monthly rental income can be 17,000 plus, but her holding cost is only 10,000 yuan, and after renting it for two years, she not only collected 420,000 yuan in rent, but also increased the value of the house. Later, the immigration company wanted to buy her house at a price of 100,000 yuan, but she did not sell it, which strengthened her confidence in investment.
Since then, she has been out of control, she bought a small high-rise building with 7 floors and 42 suites near the St. George Campus, the main campus of the University of Toronto, in the heart of Toronto, and rented it to international students and named it Bingbing Station. I remember these things very well, because I have helped hundreds of families successfully immigrate to Canada and the United States because of my work. As the actress's salary in China gets higher and higher, she invests most of her income in Canada, and has bought buildings in McGill University, Waterloo University, McMaster University, Queen's University, Western Ontario University, and almost all universities, and opened branches of various colleges and universities in Bingbing Station. Let me tell you a result, that is, each building not only creates an astronomical rental income for ordinary people every year, but also recovers the cost in an average of seven years, which is equivalent to an annual rental yield of about 14%, which is not counting the appreciation of land and housing prices. And because it has ample cash flow, it can be mortgaged from Canadian banks to get very low-interest loans for domestic purposes. Then everyone may think that I don't have the strength and channels of him, what does this have to do with us? Then listen to me finish the story.
Here is an introduction to the concept of "real estate financialization" that is popular in the world, that is, the rents that China has just introduced**. You can search on the Internet on your own, and the first batch of REITs has issued a total of eight project pilots. I'll give you an example, the expressway project is now that our people can indirectly hold the equity of the expressway by buying the REITS** issued by the state. In other words, you get your share of every penny you collect on this highway you invest. Because this form of investment is particularly good, it is difficult to buy these public offerings after they are issued by lottery. However, the annualized rate of return of the expressway is only about 5%, which is lower than the return on the property assets managed by Blackstone in today's article.
Blackstone owns 50,000 houses in the United States and has rental income, and the current real estate in the United States has appreciated again, so the annual return on this part of the investment is 25%, and the return of the woman just now is 14%, because if the rent rises every year, the house price will also rise, and the income of the REITs investor will be calculated, which is the advantage of being better than **.
I was fortunate enough to be involved in the condominium development project of the University of Waterloo in Toronto 10 years ago, and at that time I was a couple of clients who successfully immigrated through my hands, and they all became good friends. Today, the company has grown into an asset equity management company of Blackstone's nature. This year, we were invited by the province of Ontario, where Toronto is located, to participate in the new campus expansion of York University's apartment housing program, which was reported back in 2020.
York University is also one of the top 500 universities in the world, and the main academic building is expected to be completed in the fall of 2023. Even if I don't own a single room in these buildings as the original investor, the rental income of the entire community will be distributed to me every year in proportion to the equity, and I will also enjoy the profit from the increase in the value of the land. And the most important thing is that when I need money urgently, I don't need to be as cumbersome as selling a house for cash, I just need to mortgage my equity to the bank for a loan, or simply transfer the equity to others, which is much faster than the sale of fixed assets, just because this form of investment is basically zero risk and high return, and the circle connections of these showbiz stars are also very deep, so it has become the best investment target recognized by them in the circle.
Jackie Chan also bought a 120-room student apartment near UBC University in Vancouver, called "Dragon War", which is the most popular apartment for Jackie Chan fans. Director Chen Kexin and Wu Junru also invested in an apartment at Simon Haysa University in Vancouver, named "Love Jun Rumeng". Let me explain to you that domestic and foreign universities are different. In China, the school is basically responsible for the supporting facilities of the student dormitory, but 90% of the capital of the student dormitory in foreign countries comes from social investment outside the school, and students must have a place to live when they go to school, so the rent of the student apartment is not only higher than that of other real estate, but there is almost no vacancy, but as an ordinary person, there are no resources, no connections, and no contact with the circle like Jackie Chan, so what should I do?
Here I would like to share some of the internal information I have given to my friends and clients**. It's all about some of the benefits between us and our customers, and the idea and process of the Blackstone Group's operation is similar to that, because our equity is not open to everyone in the community, so I've disposed of some of the company names in the picture. After all, most people only have access to the secondary market, which is the **in**. But steady accumulation of wealth. It must be to buy equity in the primary market.
Here I will talk about the fact that in addition to student apartments, there is also land that is also a unique product in investment, and the same reason is that I now bought a piece of developable land in the United States at a cost of 5 million US dollars, and then sold the land for 10 million US dollars after making 7 links and 1 flatr.I earn a premium of $5 million in the process of building a house by a head builder like Horton or Lennar, but the sales model of American builders is that the customer will build the house after the customer has booked it, so the whole construction period will be relatively long, almost every project is in the construction and sales cycle of 3-5 years, and the land transfer fee is paid according to the construction progress. So it's like I buy a land product, earn a 20% premium every year, and double the income after 5 years. Then I split the share of the land into 10 parts, I found 10 investors, everyone contributed 500,000 US dollars, 5 years later, when the builder finished the construction of the balance to pay off, the original 500,000 US dollars doubled, and the United States ** has a legal law, this money is through the legal income of land investment, can be issued "legal income**" and will not be retroactive funds**, which gives everyone a lot of imagination.
If you have patiently read the article here, you will find that wealth is not far away from our ordinary people, but beyond your cognition, if you want to learn more about business knowledge and new concepts of financial management or just want to buy a German car to immigrate to the United States or Canada, then pay attention to me for a long time or contact me in the way you can think of, I will regularly update more stories behind the capital, Let everyone be closer to wealth. Real estate in China
I'm Harry: Follow me for Don't Get Lost and stay up to date with the latest developments in the United States.