Around the Spring Festival, real estate companies are still accelerating their best assets in exchange for cash flow, and information about the acquisition of real estate projects is also constantly coming out. Among them, Vanke withdrew from Shanghai Qibao Vanke Plaza, and Sunac China also withdrew from the development of the Sichuan Sancha Lake Changdao International Tourism and Resort Center project. In addition to the realization of domestic assets, real estate companies are also accelerating the realization of overseas assets, such as CIFI Holdings' 16 connected land plots in Sydney, and R&F Properties' One Nine Elms (Nine Elms) project. At the same time, there are still real estate companies on the way to sell and sell. For example, Country Garden intends to have a number of assets at home and abroad, and South China City is also interested in the equity of two projects in Xi'an and Shenzhen.
It is worth noting that what is the current trend of mergers and acquisitions of real estate enterprises? Which assets have the most M&A deals? Can the current favorable financing policy alleviate the urgency of realizing the assets of real estate enterprises?
Vanke, Sunac, CIFI and others transferred their project rights and interests.
On 20 February, Link Real Estate Investment Trust** announced that the company had completed the acquisition of the remaining 50% interest in Shanghai Qibao Vanke Plaza on the same day, and after the completion of the acquisition, Link REIT became the new owner of the project, while Vanke completely withdrew. Under the share purchase agreement, Link REIT will pay 23The final base price of 8.4 billion yuan is used as the acquisition consideration. In Link's view, this is in line with Link's investment strategy, which is to invest in real estate projects with long-term growth and revenue generation potential.
Shanghai Qibao Vanke Plaza has attracted attention because it is Vanke's most profitable commercial project. According to the data of Vanke's annual report, from 2020 to 2023, the operating income of Qibao Vanke Plaza ranked first among Vanke's commercial projects. Opened in 2016, Shanghai Qibao Vanke Plaza is a five-storey shopping mall originally invested by Vanke and Singapore-based investment company GIC, each holding a 50% stake. In 2021, Link won 277.2 billion yuan acquired a 50% stake in Qibao Vanke Plaza held by GIC.
At the same time, on February 9, Sunac China signed an agreement with SDIC CLP (Xianyang) Science and Technology Park*** and related parties. Accordingly, SDIC CLP will acquire 70% of the equity and debt rights of Sichuan Sanchahu Changdao International Tourism and Resort Center, Sunac China's target company, through restructuring and cooperation, with a total consideration of about 397.4 billion yuan. In this regard, Sunac China believes that this restructuring and cooperation will help solve the problem of follow-up development and construction capital investment of the target project, promote the resumption of normal development and construction of the project, and revitalize high-quality assets.
It is worth noting that there are also real estate companies that have accelerated the realization of overseas assets. On February 14, CIFI Holdings said in an announcement that as the seller, CIFI Holdings conditionally agreed to give the buyer ** its 60% interest in the property (16 contiguous land parcels in Sydney) at a consideration of A$66.3 million (equivalent to about 3.).HK$3.9 billion). CIFI Holdings** covers an area of approximately 8,700 square meters and is expected to be developed into five residential apartment towers.
On February 6, R&F Properties announced that it would take all the equity and debt of the One Nine Elms project in London. As a high-end large-scale project on the banks of the Thames with a valuation of tens of billions of Hong Kong dollars, One Nine Elms has a consideration of 1HK$00 will be paid in cash, while the consideration for the loan to be sold will be all of the existing notes to be received by the purchaser pursuant to the Exchange Offer, with a minimum principal amount of US$800 million (equivalent to approximately $62.2).HK$4.7 billion). In this regard, R&F Properties mentioned that in recent years, the group has accelerated its plans to develop and invest in properties in China and overseas**, and reallocated funds to solve financial liabilities and project completion problems. The Board believes that this ** matter may help to reduce the Group's debt and interest burden, thereby improving the Group's overall financial position.
In addition, in the listed project in January, Country Garden intends to ** a number of domestic and foreign assets to obtain liquidity. In terms of overseas assets, according to Country Garden's confirmation, at present, the Australian project is in active contact and is progressing smoothly, and it is expected to complete the assets** in the first half of the year (because of installment collection); In terms of domestic assets, Country Garden announced a list of 5 assets on the Guangzhou Equity Exchange, all of which are located in Guangzhou, including office buildings, office buildings, hotels, apartments and other properties, with a total of 38$1.8 billion.
Real estate companies are actively revitalizing assets to alleviate financial pressure.
Up to now, there are still real estate companies on the way to sell and sell, in addition to the stock of properties, there are also the equity of their subsidiaries. On February 1, China South City issued an announcement on the potential equity of Xi'an South China City, and intends to sell the equity through public bidding, accounting for about 30 of Xi'an South China City6472% equity, which can be adjusted to 386988%。If the sale goes smoothly, China South City will completely withdraw from the Xi'an South China City project. In addition, on February 5, China South City once again announced that it intends to indirectly hold 50% of the equity of Shenzhen First Asia-Pacific through public bidding.
The above two first-class equity announcements also once again exposed the financial situation of South China City. China South City said in the announcement that the above** proceeds will be used to repay loans and general working capital to alleviate cash flow constraints. Thereafter, on February 9, China South City issued an announcement about the expected default; On February 19, the major shareholder of China South City, SAR C&D, issued an announcement confirming the news of China South City's formal default, that is, the mandatory redemption proceeds of the October 2024 notes due on February 9, 2024 and the interest on the April 2024 notes due on February 12, 2024 have not been paid.
On the whole, the mergers and acquisitions of real estate enterprises seem to have rebounded in February, but from the number of mergers and acquisitions completed in January and the overall scale, the transaction enthusiasm is relatively sluggish. According to the monitoring of the China Index Research Institute, a total of 16 M&A transactions were completed in the real estate industry in January 2024, a decrease of 23 from the previous month. From the perspective of the type of business subject matter in January, the largest number of M&A transactions in the real estate industry are still real estate development business, including the equity of the insured real estate enterprises to reduce the debt burden. For example, KWG Group signed an agreement with Midea Real Estate to offset the loan with 400 million yuan of 50% equity in Ningbo Meirui to reduce the overall outstanding debt.
In the view of CRIC analysts, at present, in the real estate industry, even central and state-owned enterprises are facing greater financial pressure, which also accelerates the pace of asset disposal by real estate companies to achieve cash "blood".
It should be noted that all localities are also actively supporting real estate companies to alleviate pressure by revitalizing assets. On January 12, Guangdong issued a document proposing that it would support private enterprises to revitalize their assets through property rights transactions, mergers and acquisitions, and the acquisition and disposal of non-performing assets.
The mergers and acquisitions of real estate enterprises** are closely related to the financing environment. It is worth noting that on January 12, the Ministry of Housing and Urban-Rural Development and the State Administration of Financial Supervision issued the Notice on the Establishment of a Coordination Mechanism for Urban Real Estate Financing. In the short term, the current risks in the real estate industry are still in the process of being cleared, and major banks are still cautious about real estate loans. With the implementation of the "white list" of projects in various places, the market is expected to improve.
In this regard, Liu Shui, director of enterprise research at the China Index Research Institute, said that the establishment of the urban real estate financing coordination mechanism will be able to support real estate financing more accurately from the perspective of the project, which is conducive to accelerating the implementation of financing support policies, which can alleviate the financial pressure of enterprises on the one hand, and further stabilize market expectations on the other hand.
However, Li Yujia, chief researcher of the Guangdong Provincial Housing Policy Research Center, believes that the key is the recovery of the self-hematopoietic function of real estate enterprises. The recovery of financing cash flow is only a necessary condition for the improvement of the capital chain of real estate enterprises and the avoidance of disorderly spread of risks.
Beijing News reporter Yuan Xiuli.
Edited by Yang Juanjuan and proofread by Zhang Yanjun.