Producer/Lianshang Network & Search Shop Network
Written by/Fang Lake
In 2021, China has entered the real estate adjustment cycle, and under the big policy of national repositioning such as not speculating in housing and returning the house to the residential function, the real estate financial policy has been tightened, and the entire industry is in a state of great adjustment. Vanke Yuliang exclaimed that real estate has entered the black iron era, so where is the commercial real estate that coexists with real estate?
Beyond the Golden Age (before 2015) and beyond the Silver Age (before 2020), commercial real estate entered the Bronze Age.
01
Real estate has entered the era of black iron
▍ Yu Liang warned that real estate has entered the era of black iron
On February 9, Yu Liang, chairman of Vanke, summed up at the company's annual meeting, bluntly saying that real estate has entered the "black iron era". The main points are as follows:
1, 2022 will be a year of broken boats, backwater war, either dead or alive, there is no intermediate state.
2. Real estate has entered the stage of shrinking the balance sheet and clearing out, and the balance reduction is a life and death battle.
3, real estate de-financialization, investment, the state does not allow real estate to occupy too much financial resources.
4, the industry opened a new development model, that is, "one center, three basic points", to solve the problem of people's residence is the center, housing is not speculated.
5. In the era of black iron in real estate, the income of personnel has dropped sharply.
▍The tide of real estate closures has emerged
Under the dual pressure of stagnant sales and bank tightening, the top real estate companies have experienced higher cash flow pressure, and some enterprises have defaulted on debt, bankruptcy and restructuring or even bankruptcy.
As of December 31, 2021, public data shows that there are 396 bankruptcies of real estate enterprises in China in 2021. On average, 1.08 housing enterprises are dumped every day, and we predict that the number and scale of bankruptcies of such small housing enterprises will continue to expand and continue in 2022.
▍The advance of the country and the retreat of the people have become the trend and the norm
In the future of the real estate industry, it may be the norm. The advance of the country and the retreat of the people are mainly reflected in two aspects:
On the one hand, it is to take land. In 2021, judging from the land acquisition of major housing enterprises, in the second round of centralized land supply in 22 key cities, the housing enterprise with the highest amount of land acquisition is China's overseas development and is a central enterprise; the second is Poly Real Estate, which is a central enterprise; the third is China Railway Construction, or a central enterprise. Among the top 10 housing enterprises with land volume, 60% are central enterprises, 30% are local state-owned enterprises, and only Longhu Group is a private enterprise.
There are three influencing factors behind the phenomenon of "the country advancing and the people retreating":
1. From the perspective of the "three red lines" indicator, the overall debt ratio of state-owned enterprises and central enterprises is significantly lower than that of private enterprises, especially local state-owned enterprises, the "three red lines" risk indicators are very low, many are green files, and have the basis for continued expansion.
2. From the perspective of financing capabilities, at present, central enterprises and state-owned enterprises still have the advantage of financing, and the cost of financing is low.
3. From the perspective of the market, the current competition in the land market is weak, the situation of high land premium has basically disappeared, and some high-quality land plots have certain development potential, which is also worth the help of enterprises, but the current capital chain of private enterprises is tight and weak.
On the other hand, the state-owned assets platform takes over the local private leading housing enterprises. Under the land finance, real estate enterprises have always been the main source of local fiscal revenue, in the local real estate enterprises in the crisis on the one hand related to local fiscal revenue, on the other hand, because the real estate industry chain is long, involving a wide range, from home buyers to bank loans, local employment, taxation will have a destructive impact, through the local state-owned assets platform restructuring can reduce the short-term impact to the minimum. For example, Nanjing's Yurun Group, Suning Group and Guangzhou Evergrande have all been involved in local government intervention and supported by local state-owned assets.
02
Commercial real estate entered the Bronze Age
▍ The symbiotic relationship between business and real estate may be severed
Commercial real estate = commercial + real estate, without the cash flow and comprehensive support of real estate, commercial real estate has broken a thigh.
1. Commercial complex development is still dependent on real estate
In particular, the development and operation of urban benchmarking and super complexes involve shopping malls, star hotels, office buildings, apartments, high-quality residences, commercial streets and other types of real estate products, whether it is Sun Hung Kai's IFC or China Resources MixC, relying on the background of comprehensive real estate developers.
2. Asset-light model with greater limitations
On the one hand, due to the larger restrictions on the location of the project and the property conditions; on the other hand, because the commercial asset-light return cycle is long, it is unlikely that there will be a large capital investment in pure asset-light assets, and the construction and investment of the project will be unlikely to be very high, and it will be impossible to make high-quality benchmarking projects.
3. The financing channels of Chinese business are relatively limited, and they are crowded in the listed one-wood bridge
▍ Dragged down by real estate Commercial real estate into the Bronze Age
Business is doing long-term rental returns, with stable cash flow, relatively stable; real estate is short-term sales collection, the cycle is short and fast, the rate of return is high, but it is over when it is sold out.
With real estate support, commercial real estate is two-legged walking, both the stable return of commercial long-term rent, and the support of early real estate sales funds, which can make greater investment and higher specifications of commercial works.
Without the support of real estate, without this thigh, it is difficult to make high-standard commercial complex products by relying only on the rental return and cash flow of the business itself, on the other hand, without the support of real estate cash flow, the rapid large-scale development of business will also be greatly affected.
Without real estate support, china's commercial financing channels are relatively single, the overall commercial situation is oversupply and structural imbalance, and commerce has entered the Bronze Age.
▍The total amount of social zero and offline retail continue to grow, and consumption promotes business development
According to the relevant statistics of the past decade, the total amount of national social security has maintained steady growth, and the total GDP has remained in the range of 38-44%, from 2021 to 44 trillion, which is 44% of the GDP of that year.
The relationship between offline retail and social zero total amount showed a downward trend from 93.6% in 2012 to 70.6% in 2021. In 2020 and 2021, although affected by the epidemic, it was basically stable at 70%. The above shows that the downward trend of offline retail has basically bottomed out; under the high cost of online, offline retail may usher in a growth trend.
03
What about Bronze Age commerce?
Inner volume is synonymous with competition, not only external industry internal volume, but also internal internal volume of enterprises. Everyone jokes that bosses and personnel are considering how to kill you to alleviate and buffer the pressure of competition in the external market. So how to do Bronze Age business, I roughly summarize three points:
▍Controlling cash flow is the life and death line of enterprises
The tiger came, not to eat everyone, but the one who ran the slowest; when the epidemic came, not all businesses would go out of business, and it was the company that ran out of cash flow that went out of business.
Not rent, not profit, but cash flow, managing the cash flow of the enterprise is the last lifeline of the survival and development of the enterprise. In the face of 1.95 trillion yuan of huge debts, evergrande of the super giant, broke out of the debt crisis and had to move towards debt restructuring.
1. Upgrade the operation and improve the revenue model
The income structure of commercial projects is relatively single, mainly based on rent and property fee income, plus some parking lots and multi-economy income, which is also relatively fixed. Can expand the thinking, from the operation of fixed shops, to the operation of commercial space upgrade, then in this dimension, only the space of the shopping center can obtain income, not only fixed shops, can be non-fixed shops, more through the point, passage, atrium.
It can also be not a shop, such as an outer square, a roof, a gold street, a parking lot or even an exterior wall, space as a service, service as income.
If the commercial operation is further upgraded to traffic operation, it can expand revenue through traffic, increase the sales of merchants to achieve revenue increase, obtain marketing cooperation and title income of brands and merchants through traffic management, obtain various types of advertising revenue through offline traffic, and so on.
Upgrading the business model, from shop leasing to space management, and then to traffic management, then from a limited fixed bunk, expanded to a larger all-round space operation, and then extended to unlimited traffic operation, there is a broader space to open the mind, and the income structure is no longer limited to rental property fees.
2. Simplify management and control costs
Before the crisis, most companies began to do a standard action is to reduce costs, reduce staff and increase efficiency. Simplifying management and reducing costs is on the one hand, and more importantly, before the crisis comes, we managers must have a judgment and decision-making, simplify the management level, simplify the decision-making mechanism, accelerate the implementation process, and seize the limited market opportunities by improving efficiency, and adapt to the changes in the fierce market competition faster and better.
Cut off unnecessary management, cut off unnecessary costs, light loads, enterprises have no pressure, in order to run faster when the tiger comes.
3, short-termism to ensure cash flow
Seeing close and going far, short-termism is not necessarily a good thing, and countless short-term goals constitute long-term goals. Decomposing and landing each short-term goal, implementing it in place, and ensuring that the cash flow of the enterprise does not appear to be risked to the greatest extent, this is the red line of the bottom line. This is also what short-termism must achieve and ensure.
▍Return to the essence of business and do a good job
1, do not take the usual road, adhere to their own characteristics
You can learn from it, you can imitate it, but in the end you have to go your own way. Taking the development of China's fuel vehicles as an example, with technology for the market, we strive to catch up, but we have never been able to cross the three mountains (brand, patent, core component manufacturing).
Switching to the new energy vehicle track, China and leading countries in Europe and the United States stand on the unified starting line, China has gained the opportunity to lead the world, although China has achieved the United States Tesla (The Chinese market and the super factory), but also caused a number of world-leading Chinese car companies with independent technology and brands, such as the transformation of traditional car companies to represent BYD, great wall, Chery, etc., the new forces Ofil, Ideal, Xiaopeng and so on.
Highly competitive commercial industry, the era of simple copying, copying the brand, according to the gourd painting scoop has passed, with the characteristics of the project as the foothold, adhere to their own positioning, shape the project differentiation, and strive to meet and serve the surrounding customer groups, in order to go better and farther.
Homogenization of businesses without characteristics and positioning is not far away under strong competition.
2. People-oriented, consumer-centered business transformation
In fact, the two dimensions of commercial upgrading operation mentioned above, the first dimension is upgraded to space operation, and the second dimension is upgraded to traffic operation.
Business development to today, from the business project as the starting point, to the operation of the brand as the starting point, to today's management of consumers as the starting point, from the plan to the market, from supply to demand changes.
Because the industry is fully competitive and consumers have more choices, if they cannot meet and continue to meet the needs of target consumers, consumers will stay away from or even abandon this business, resulting in the lack of traffic in the business and the closure of the door.
It is understanding consumers from the perspective of human nature, gaining insight into consumer needs, interacting with consumers through space scenes, brand renewal, and service innovation, guiding consumer trends, creating consumer surprises, and meeting consumer demand, then this business may have greater traffic and go further.
3. The core link of the value chain
Every business and project has its own value and positioning. Find the positioning of the project, focus on the core value, and achieve this value to the extreme, so that consumers can fully perceive, experience and disseminate, then this value point may be magnified into corporate characteristics and culture, so that the enterprise can go further.
For example, the core value of Fat Donglai is service, and the service is maximized through the spirit of craftsmanship. Through four core key improvement services: the service is rooted in the corporate culture, the spirit of industry scientists is used to polish the service, the supporting hardware is used to improve the service, and the details are done to achieve service landing.
Fat Donglai moves consumers through service, systematically and institutionally "carries out the service to the end", continuously lands and innovates, and becomes a core weapon that cannot be copied. Many people go to visit and study, and they feel very deeply, but most companies have not made services into core competitiveness.
4. Long-termism ensures the sustainable development of business
Time is the best friend. If we stretch for a long time, we can see cause and effect, see trends, see laws. According to the project life cycle, judge the development stage, and formulate the corresponding business planning, asset management policy, investment promotion strategy, marketing and operation plan according to the project positioning or secondary positioning.
When releasing water and raising fish, do not dry up and fish, reasonable upgrading timing will never pull up seedlings to promote growth, the adjustment of planning will never wait for rabbits according to the soldiers, and the initiative to market will never rely on rain.
Judge economic trends, gain insight into market opportunities, understand the project cycle, do the right thing in the right opportunity, do not be conservative when attacking, do not stick to the adjustment when it is adjusted, do not give up the effort to adjust the brand when it goes up, do not continue to covet the peak of rent when it goes down, and build a comprehensive competitiveness system to evaluate the long-term trend of business from multiple dimensions of income, brand portfolio, shopping mall traffic, and social reputation.
Stretching the long history, commercial projects do not have to maximize the income (rent) at every stage, nor do they maximize the flow at each stage, but also optimize the brand portfolio at each stage, and we need to make different combination strategies at different life stages of the project to achieve the sustainable development and value maximization of the overall project.
▍ Establish a business ecology and make the circle of friends bigger
Business is relatively complex system, like the species in the natural ecosystem, every link in the business ecosystem is part of the entire business ecosystem, and every enterprise must ultimately share the fate with the entire business ecosystem.
The first level: TB faces the brand, Tb faces the brand agent or investor
The second level: TC to the consumer
The third level: TG faces government departments
The fourth level: TI asset-light partners
......
There may be more than the above four levels, each level is a dimension of operation.
It is precisely because of the complexity of the business ecology that there are many links involved, resulting in an increase in the difficulty and complexity of commercial operations. It is necessary to organically integrate these seemingly scattered links into a system through the business management team to make them serve us, and through continuous coupling, interaction and innovation, in order to exert the greatest synergy and maximize the competitiveness of business.
Conclusion
Entering the bronze age of commercial real estate, it calls for less internal rolls, simplified management, control costs, upgrading operations, and improving efficiency. Focus on the front line of the market, the first line of consumer communication, and the first line of brand collaboration, so that people who hear the sound of guns on the front line can have some right to fire.
The combination of long-term business objectives and short-term benefit indicators, not pulling up seedlings to promote growth, not fishing in the mountains, not looking at the master and low, not going in the opposite direction, is to take fewer detours and make more contributions.
Insisting on positioning, adhering to characteristics, maintaining good interaction with brands and consumers, and operating their own circle of friends is the biggest victory. After the cold winter has passed, it will be spring and warm flowers.