Have the confidence to overcome difficulties! Zhang Li talked about R&F to develop a new chess game

R&F Properties is experiencing the current difficulties in the real estate industry, and R&F Properties has a deep development heritage, and has returned to the safe zone through the haze amid the difficulties faced by the entire industry.

Zhongfang Daily reporter Miao Ye reported from Beijing

The times are changing, the industry cycle is changing, and it is sharp and cruel.

In 2018, at Vanke's regular internal meeting in the autumn, Yu Liang, chairman of the board of directors of the company, shouted the slogan of "Survive" for the first time, which stirred up thousands of waves with one stone. At that time, the real estate industry was like a blazing fire.

Six years later, the words became a prophecy.

On March 29, 2024, Vanke held its 2023 results conference. Yu Liang said that Vanke's management team will resolutely "not lie flat" and will definitely cross this stage threshold, and will increase efforts to revitalize the stock and change the real estate, and reduce interest-paying debts by more than 100 billion yuan in the next two years to ensure the safety of the company.

Vanke, which has walked down the stairs, is just a typical microcosm of the overall bleakness of the real estate industry.

A recent research report by Everbright Securities explained that the financing side is more cautious about the financing of real estate enterprises, the supply of funds has contracted, and the local government has once again tightened the supervision of pre-sale funds for commercial housing. Everbright Securities concluded in the research report: "The loan turmoil in some cities has curbed the recovery of industry confidence and delayed the recovery of sales, and the willingness of potential home buyers to buy houses has been hit again. ”

"In the past, we have a brilliant track record. At present, the entire real estate industry is still in an unprecedented winter, and the short-term liquidity pressure brought about by the market downturn has posed a huge challenge to R&F's business development. Recently, Zhang Li, chairman of R&F Properties Group, said at the company's 30th anniversary summary meeting that confidence and fighting spirit are more important than gold in the face of many dangers and obstacles.

R&F Properties was founded in 1994, since the construction of the first project Guangzhou R&F Garden, R&F Properties started from a residential real estate of only 20,000 square meters, and has grown steadily all the way, and has now become a leading real estate enterprise with a cumulative delivery area of more than 100 million square meters, more than 4 million community owners, a cumulative tax payment of more than 130 billion yuan, and a cumulative payment of more than 300 billion yuan in land transfer fees.

R&F Properties is experiencing the current difficulties in the real estate industry, and R&F Properties has a deep development heritage, and has returned to the safe zone through the haze amid the difficulties faced by the entire industry.

On April 5, Easy Tactic, a subsidiary of R&F Properties, disclosed that the company's three US dollar bonds had been successfully agreed. It is reported that the maturity dates of these three bonds are 2025, 2027 and 2028 respectively. The move means that R&F Properties' subsidiary, Ellio Limited, will be able to continue to advance the issuance and repayment of US dollar bonds as planned.

In the past few years, R&F Properties has also become one of the most severe debt pressures in China due to various reasons such as operating and market factors. In the face of this major dilemma, R&F Properties actively responded by taking multiple measures to resolve debts, resulting in the restructuring and extension of maturing debts totaling about RMB46.7 billion, and becoming the first domestic real estate company to complete the full extension of domestic and foreign bonds.

In the face of the current difficulties, Zhang Li also revealed a new development plan and confidence to the outside world - the group has a large number of high-quality operating properties, sufficient land reserves and saleable volumes, the overall development is stable, and the assets far outweigh the liabilities, so it has sufficient confidence to tide over the difficulties, and its future development is guaranteed.

"For example, we have a completed spot value of about 50 billion yuan in the country, and the unsold value of the goods that have been certified and will be certified in the near future is about 40 billion ~ 50 billion yuan. In addition, there is abundant reserve for the renovation of the Greater Bay Area, and the project is in a superior location, with guaranteed profits, and sales can be quickly realized once the market recovers. Zhang Zhang said.

With the prosperity of China's real estate industry and the great development of urbanization, R&F Properties has moved from Guangzhou to the whole country, from a single real estate development to a diversified layout, creating a number of miracles in the industry, and creating a unique and distinctive "R&F label" one after another, becoming one of the most representative enterprises in the industry.

"Although the real estate industry is still facing many unprecedented difficulties and challenges, as long as we have firm confidence and sufficient ability, we are confident to lead all R&F people to overcome difficulties and overcome difficulties with the spirit of fighting heaven and earth. Zhang Zhang said.

There are "leaders" who have left the market in the midst of changes, and there are also "steady" who are winning the trust of the market with their strength.

30 years of old reform has power

R&F Properties is known as the "King of Old Renovation" in Guangzhou, and there is a saying in the industry: "Every chimney in Guangzhou has a share of R&F's credit".

Since the launch of the renovation project of Jiabang Chemical Plant in Liwan District, Guangzhou in 1994, R&F Properties has made great progress on the road of renovation of old factories, turning more than 10 old factories such as Guangzhou Copper Factory, Sulfuric Acid Plant, Boiler Factory, Fan Factory, Coal Plant and Cement Plant into new livable communities and commercial complexes. Following the strategy of "demolishing old factories and building new houses", R&F Properties has created a series of classic works of urban renewal.

Since then, R&F Properties has been leading the wave of urban renewal construction. In 2000, he entered Beijing and built a super-large community - Beijing R&F City on the site of the old factory of the East No. 5 Factory outside Guangqumen, Beijing, which has become a "legend" in Beijing's real estate industry because of the realization of "land purchase, development and sales in that year". Since then, the new concept of Nanpai Architectural Design has opened up the northern market for R&F Properties, and then expanded to the north and south, extending its business to Shanghai, Tianjin, Xi'an, Chongqing, Chengdu, Taiyuan, Hainan and other core cities and regions, and the national strategic layout has begun to enter the fast lane of rapid development.

In 2005, R&F Properties was officially listed on the Main Board of the Hong Kong Stock Exchange (Stock Code: 2777), and in the first trading day, it became the largest mainland private enterprise in Hong Kong to raise funds in H-shares.

"A Zhujiang New Town, half of R&F builds", taking the opportunity of the construction of the CBD of Guangzhou Zhujiang New Town, R&F has fully entered the field of commercial real estate by taking advantage of the eastward expansion of Guangzhou's urban core. More than a dozen super Grade A office buildings, international luxury hotels and modern shopping malls have been built in Zhujiang New Town, creating one commercial landmark building after another. More than 40 skyscraper Grade A office buildings have been built in Beijing, Shanghai, Hangzhou and other core high-quality business districts, forming a three-dimensional and huge "international R&F city value system" and shaping a model of win-win and common prosperity between enterprises and headquarters cities.

From the old to the new, from barren to prosperous, over the past 30 years, R&F Properties has been crowned with different titles such as "Renovation Professional", "CBD Creator" and "Global Luxury Hotel Owner", each of which confirms the milestone development peak that R&F Properties has gone through.

Return to the safe zone

The downward trend of the real estate market has also made it difficult for R&F Properties to move forward.

As the first real estate company to complete the overall restructuring of domestic and overseas debts, R&F Properties is still not having a quiet time. United Credit has said in the rating report that in the coming period, R&F Properties will still need to deal with the pressure of concentrated debt maturity and project delivery through asset disposal and debt extension.

Clearly, the market's fears have not completely receded. Where is the "confidence" of R&F Properties to return to the safety zone?

"Interest-bearing liabilities have dropped from about 160 billion yuan in 2018 to more than 80 billion yuan now, and the amount of unpaid project payments and commercial bills payable is not large. Zhang Zhang said that R&F has a clear debt structure, no off-balance sheet debt, private equity fundraising, etc., and the overall risk is controllable. The Group has high-quality operating properties in operation with a construction area of about 6 million square meters, with a total market value of more than 100 billion yuan if estimated at an average price of 20,000 yuan per square meter, and has strong anti-risk ability.

In addition, R&F also has about 750,000 square meters of high-quality operating properties that are close to completion, such as Beijing Tongzhou, Guangzhou Huanmao Port, Shanghai Hongqiao and Tianjin Marriott, which can be completed and opened with only a small amount of capital investment, which will create stable cash flow and owner profits for R&F Group.

The land bank also provides strong support for R&F Properties' sustainable operation.

It is reported that R&F Properties has an unsold land reserve of about 710 billion yuan, corresponding to more than 80 billion yuan of land transfer fees paid and more than 30 billion yuan of project costs. Most of the unsold land banks are located in first- and second-tier cities, while third- and fourth-tier cities have a low proportion of land reserves, and even fewer unsalable and loss-making projects.

This round of in-depth industry adjustment has entered its third year, and like most real estate companies, 2024 is destined to be an easy year for R&F. However, R&F was the first real estate company to manage huge debts, and it has made great efforts during this period, and the capital operation after the risk has been regarded by many latecomers as one of the "emulators", whether it is the communication with investors or the options provided in the rollover plan, R&F has something to learn from.

On the road to debt reduction, R&F has always been ahead of the industry.

On 6 February, R&F Properties announced that it had entered into a letter of intent with London One Limited (the purchaser) to transfer the entire issued share capital of R&F International Properties Investments and transfer the loan for sale, and the buyer will acquire the shares for sale and accept the transfer of the loan for sale. R&F International Properties' main assets are two towers, River Tower and City Tower, located in London, UK.

The person who rushed to the aid this time was R&F's old friend, Zhang Songqiao, chairman of the board of directors of Zhongyu Land, known as "Chongqing Li Ka-shing".

"In the face of the current temporary liquidity difficulties, we must adhere to the open source and reduce expenditure, and earnestly grasp the policy to strive for capital replenishment. Tension emphasized.

The first is to promote sales and quickly collect payments, which is a top priority.

Zhang Zhang requires the person in charge of the company at all levels to concurrently serve as the person in charge of sales, grasp the spot to remove the payment with one hand, and grasp the supply and sales of the sales project with the other hand, especially for the spot with a long age can be appropriately discounted and promoted, in order to quickly return the funds.

Second, all regions and regional companies fully implement cost control and expenditure reduction.

"The leadership groups at all levels should set an example, manage their own money bags, strictly economize, live within their means, and continue to reduce unnecessary expenditures. Zhang Zhang said, especially in view of the recent sharp price reduction of building materials such as concrete, sand and gravel, steel bars, management teams at all levels should increase efforts to strictly control project expenditures, and strive to reduce construction and installation costs by 30%.

The third is to step up the promotion of loans for high-quality operating properties.

In Zhang Li's view, the work of operating property loans is very important to R&F Group, which can not only revitalize high-quality assets and introduce fresh water, but also reduce debt shackles and litigation entanglement, so that R&F Group can travel lightly to survive the harsh winter. He reiterated that personnel at all levels of the group must attach great importance to it, firmly grasp the east wind of the new policy, take it as a top priority, overcome difficulties, and allocate resources from all parties to fully cooperate with relevant work.

Fourth, the application of the "white list" of the project and the implementation of the relevant financing plan, which is the top priority of the recent work.

"These can replenish the funds needed for the normal construction of the group's projects, alleviate the current liquidity crunch, and accumulate strength to survive the cold winter. Zhang Zhang said that at present, dozens of projects of the group have entered the "white list" in various places, and all regions, regions and project management teams must attach great importance to it, seize the reporting window period of the "white list", and all projects under construction should be reported to the fullest, and try to increase communication, negotiate with the corresponding financial institutions, and strive to implement the project financing increment as soon as possible.

"Although the real estate industry is still facing many unprecedented difficulties and challenges, we will lead all R&F people to overcome difficulties and overcome difficulties with the spirit of fighting heaven and earth. Zhang Zhang said.

After 2024, R&F Properties will be a new world.