Source: Interface News
Interface News Reporter |
Property management used to be one of the hottest sectors of China's real estate market. Especially from 2019 to 2021, capital is hot, financing is easy, property companies are vying to go public, and the industry once ushered in rapid growth.
However, in the past three years, affected by the downturn of the upstream real estate industry, the incremental market space for property management is limited, and the competition in the stock market has become more and more fierce.
According to the "2024 Research Report on China's Top 100 Property Service Enterprises" released by the China Index Research Institute on April 18, in the past year, the scale growth of China's top 100 property service enterprises has changed from quality to quantity, and the reserve area has changed from increasing to decreasing.
According to the report, in 2023, the average management area of the top 100 enterprises will be 67.981 million square meters, a year-on-year increase of 6.21%, a decrease of 6.22 percentage points from 2022, and less than 10% for the first time in nearly five years, and the average contract area will be 87.5936 million square meters, a year-on-year increase of 2.16%, and a decrease of 9.43 percentage points from 2022.
During this period, the management area and contract area of some of the top 100 enterprises decreased to varying degrees. The China Index Research Institute pointed out that the top 100 enterprises took the initiative to withdraw from some "lagging" projects for business efficiency considerations, replacing quantity with quality, and improving the efficiency level of retained projects.
Changes in the average management area, contract area and growth rate of the top 100 enterprises from 2020 to 2023. Image source: Middle Finger Research Institute
In addition, some PMEs have automatically terminated some projects that have not been renewed during the year, and the area under management has shown a downward trend when the new projects cannot fully cover the reduced projects.
In the context of the slowdown in the development of the industry, the differentiation of enterprises has further intensified, and the growth rate of leading enterprises has been faster. According to the data of the China Index Research Institute, the average management area of the top 10 enterprises in 2023 will reach 453 million square meters, a year-on-year increase of 13.01%, and the average management area and growth rate are 6.67 times and 2.10 times that of the top 100 enterprises, respectively.
The overall downturn in the real estate market has adversely affected the reserve area of property companies.
The report pointed out that in 2023, the average reserve area of the top 100 enterprises will be 18,817,800 square meters, a decline for the first time, a year-on-year decrease of 10.15%, and they will face greater pressure in maintaining the continuous growth of the management area and project expansion in the future.
"From the absolute value of the reserve area, the current reserve is about one-third of the management area, which can still support the steady development of the top 100 enterprises for a certain period of time in the future, but the long-term scale growth of the enterprise faces certain challenges. ”
The China Index Research Institute believes that from the perspective of long-term development trends, the increment of the real estate development market has gradually contracted, the area of new construction and the area of commercial housing sales have declined year after year, and the project supply of real estate related parties will gradually become an important supplement to the scale expansion of the top 100 enterprises.
At present, property management companies are still facing a problem: the proportion of non-residential management area is declining, and professional barriers have yet to be broken.
According to the data, in 2023, the non-residential management area of the top 100 enterprises will account for 34.16%, a decrease of 1.12 percentage points from 2022, changing the trend of continuous growth in previous years.
The main reasons behind this are, firstly, the completed area of commercial housing in 2023 will be about 998 million square meters, of which 724 million square meters will be completed residential, and many of the top 100 companies will undertake more new residential projects; secondly, compared with the residential format, the non-residential format is more professional, and there are certain professional barriers in the field of subdivided formats; in addition, the M&A market will further return to rationality in 2023, resulting in a slowdown in the expansion of non-residential buildings.
However, in the past year, the management area of hospital properties and public properties of the top 100 enterprises accounted for 3.84% and 3.81% respectively, and the proportion has increased. This means that these major fields are highly specialized and have certain barriers to entry, and the current competition is relatively scattered, and there is room for development and integration.
In 2023, while the overall scale of property enterprise management will decline, the revenue growth rate will continue to slow down.
According to the report, the average operating income of the top 100 enterprises last year was 1.55 billion yuan, a year-on-year increase of 4.56%, and the growth rate decreased by 6.06 percentage points compared with 2022, falling below 10% for the first time. The average operating income of the top 10 enterprises was 14.244 billion yuan, a year-on-year increase of 8.72%, a sharp decrease of 12.83 percentage points from 2022.
At the same time, the profit margin of the industry as a whole has declined, the gross profit has increased slightly, and the risk has gradually cleared. In 2023, the phenomenon of "increasing revenue but not increasing profits" of the top 100 property companies will also continue, with an average net profit of 83.855 million yuan, a decrease of 11.18% from 2022.
The average operating income and growth rate of the top 100 enterprises from 2019 to 2023. Image source: Middle Finger Research Institute
According to the China Index Research Institute, the main reasons for the decline in profits include: first, due to the influence of related parties, the value-added services of non-owners have been greatly reduced, and the proportion of high-margin businesses has declined, which has changed from the past profit "contribution point" to the current "heavy burden"; Third, in 2023, the top 100 companies will make provision for goodwill impairment out of prudence.
"In the context of the stock market, property service enterprises are facing fierce competition for survival and development, and returning to the origin of service has become the only choice for enterprises to continue to operate and develop. According to the report, the top 100 enterprises take the construction of a standardized system that can be implemented as the starting point, and fully implement it from multiple dimensions such as service processes, operation specifications, and objective evaluation, so as to realize the standardization of project management and ensure the standardization and efficiency of enterprise operations.
What is the development potential of the industry and how to break through?
The report pointed out that from the perspective of the long-term development of the industry, while doing a good job in basic services, various value-added services and innovative services are still areas that property companies must overcome, especially after the real estate development market enters the stock era, how to fully explore the advantages of the property and further activate the potential of diversified tracks is an important topic faced by the industry.
For example, the application of science and technology empowers all formats and scenarios, and solves management problems by intelligent means. In addition, talent is the core driving force for the sustainable development of the property management industry, attracting outstanding talents, retaining professional talents, stimulating employee enthusiasm, and enhancing the value of the industry.
In addition, we will actively fulfill our social responsibilities. The top 100 enterprises break the boundaries of community services, assist in street governance, actively participate in urban services, carry out related businesses in all scenarios, and contribute to social construction.
"The property management industry has entered an era of low growth, but it is still full of opportunities. The China Index Research Institute believes that in the future, the top 100 property companies will take advantage of the trend, continue to explore and innovate, and lead the industry to develop in a healthier and more sustainable direction.