Attention: Sentiment Index
Abstract: The revenue generation and profitability of leasing enterprises are growing steadily, and the leasing business is moving forward firmly.
In the past year, housing rental companies have achieved good results in terms of scale, revenue, profitability and other aspects, promoting the high-quality development of the industry.
The total annual revenue of the six real estate leasing companies that have disclosed their 2023 results is 8.223 billion yuan, a year-on-year increase of 6.97%. At the same time, the leasing company that officially announced that it has achieved profitability has added new members, and the company's revenue generation and profitability are steadily improving, and the leasing business is firmly moving forward.
In terms of scale, the store opening data of the sample enterprises in the opinion index last year increased compared with 2022, and the number of opened houses further expanded. In the first quarter of this year, the pace of project entry continued to accelerate, and the number of new projects increased year-on-year.
The performance of rental housing REITs is also remarkable, with the cumulative amount available for distribution, rental income and other indicators in 2023 exceeding expectations, and the occupancy rate of underlying projects remains high, highlighting the robustness of rental housing REITs.
The backbone of the industry is highlighted, led by Vanke Boyu, followed by Longfor Guanyu and Rubik's Cube Life Service
The "2024 Operational Excellence of Housing Rental Enterprises" combines various research systems such as operational capabilities, revenue efficiency, management efficiency, business models, brand value and social contributions, and takes stock of housing rental companies with excellent operation and management capabilities in the past year.
In the end, Vanke Boyu, Longfor Guanyu and Rubik's Cube Life Service broke through the situation with their operation and management capabilities and ranked in the top three in the research list, while Lingyu, China Merchants Eden Apartment, China Resources Youchao, Lehu Group, Ziru Asset Management, Bairuiji Group and Xiangyu also demonstrated excellent operation and management capabilities in the past year, bringing customers a high-quality living experience.
Judging from the performance disclosed by the company, as of the end of 2023, the number of opened rooms of Vanke Boyu, Longfor Guanyu and China Merchants Eden has been 180,100, 123,000 and 29,500 respectively.
Relying on its outstanding capabilities, Braegel Group has cooperated more closely with asset holders, and its cooperation projects in Changsha, Nantong, Zhengzhou and other places have been launched in the first quarter of this year.
At the same time, the operating projects of Vanke Boyu, Longfor Guanyu, China Resources Youchao and Ziru Asset Management operated steadily, and the occupancy rate of the projects under management continued to maintain a high level.
The scale and revenue increased again, and the profitability of leasing companies performed well
In the past year, with the encouragement of policies, capital and markets, the housing rental market has continued to develop healthily, and leasing enterprises have entered a stage of high-quality development.
Data source: Opinion Index, of which Xiangyu is 2023H1 data
In the leasing sample according to the opinion index, the leasing companies that have opened more than 100,000 units include Ziru, Xiangyu, Boyu and Guanyu, with obvious scale advantages. At the same time, leasing companies with a scale of more than 50,000 units have been opened, including Rubik's Cube Apartment, Lehu Apartment, Bairui Ji and Lingyu.
Compared with the end of 2022, the scale of the number of houses opened by leasing companies has increased significantly. By the end of 2023, the number of rooms opened in Park, Guanyu, China Merchants Eden and Chengjia Apartment was 180,100, 123,000, 29,500 and 35,900 respectively, with a year-on-year increase of 8.04%, 6.03%, 10.19% and 48.92% respectively.
In terms of occupancy rate data, leasing companies will continue to demonstrate stable project operation and management capabilities in 2023, and the occupancy rate of projects in operation will remain stable. The overall average occupancy rate of the sample enterprises according to the opinion index was 92.57%. Among them, many leasing companies such as Boyu, Guanyu, Lingyu, Gemdale Strawberry, Chengjia Apartment, Zhonghai Long-term Rental Apartment, etc., have performed well in terms of occupancy rate, and the average occupancy rate of mature projects exceeds 90%.
Data source: corporate announcements, opinion index collation
Note: Rental income of Zhonghai long-term rental apartment in 2022 = rental income from investment properties - income from office buildings - income from shopping malls
In terms of revenue, the total annual revenue of the six real estate leasing companies that have disclosed their 2023 results is 8.223 billion yuan, a year-on-year increase of 6.97%, of which the contribution of Boyu accounts for 42.08%, and the income-generating capacity of leasing enterprises has grown steadily.
Judging from the disclosed and past revenue performance of leasing companies, leasing companies with revenue of more than 1 billion yuan in 2023 include Xiangyu, Boyu, Guanyu, China Merchants Eden and Rubik's Cube Life. The annual results of Xiangyu have not been disclosed, and both Boyu and Guanyu have recorded revenues of more than 2 billion yuan, with annual revenues of 3.46 billion yuan and 2.55 billion yuan respectively, a year-on-year increase of 6.79% and 6.25%. With the blessing of scale, the head effect of leasing enterprises is highlighted.
In 2023, the annual revenue of many leasing companies such as Boyu, Guanyu, Youchao Apartment, China Merchants Eden, and Gemdale Strawberry will achieve different degrees of year-on-year growth, with growth ranging from 5.37% to 58.33%. For example, China Resources Youchao had an annual turnover of 700 million yuan (including light asset management projects), an increase of 9.5% year-on-year. The increase in revenue of leasing enterprises was mainly due to the stable operation of new projects entering the market and projects in operation.
The performance of serviced leasing companies is also remarkable. According to CapitaLand Investment, Ascott's management fee revenue for the full year of 2023 increased by 28% year-on-year to S$331 million, and the lodging business has become an important part of its overall business revenue.
Ascott said it is actively seeking to accelerate expansion and plans to achieve a fee revenue target of more than S$500 million by 2028. This year, it plans to open 27 projects, with an increase of more than 8,000 rooms, and more than 20 new properties and more than 5,000 apartments and hotel units in China in 2023.
It is worth mentioning that leasing companies have also achieved good results in the profit examination papers, and new members have been added to the leasing companies that have publicly announced that they have achieved profitability.
Vanke said at the 2023 annual media conference earlier that Boyu began to achieve positive profits for the first time in May and June last year. At the same time, Vanke officially announced in its 2023 annual report that the Boyu business achieved overall profitability under the cost method, with an EBTIDA of RMB665 million, a year-on-year increase of 32.3%.
Before Boyu and Lingyu announced their profits, only Longfor Guanyu and China Merchants Eden had publicly announced their profitability among the leasing companies of real estate enterprises.
According to Longfor, the long-term rental apartment channel continues to contribute to rents and profits. Longfor's C3 channel includes four product lines: long-term rental apartment - Guanyu, industrial office - Blue Ocean Engine, serviced apartment - Xia Fei Mansion and vitality block, and C3 channel has achieved a profit of more than 600 million yuan. According to the 2023 annual report of China Merchants Shekou, the annual operating income of the long-term rental apartment business in 2023 will be 1.088 billion yuan, and the EBTIDA will be 689 million yuan.
Based on the livelihood attributes of the rental market, long-term rental apartment products have the characteristics of high investment, long cycle and slow return, which also determines the need for long-term stable operation of leasing enterprises. The opinion index believes that after the leasing enterprise reaches a certain management scale, the initial investment is basically completed. With the cost control of the enterprise and the stable operation of the project, the harvest period has begun.
The leading leasing companies have successively announced that they have achieved profitability, injecting development momentum and confidence into enterprises and new brands that stick to the rental field, and at the same time promoting the upward development of the market.
In addition, in August last year, Rubik's Cube Life was notified by the Securities Regulatory Commission for overseas listing. At the same time, the market has reported the news of its listing in Hong Kong, and the market is particularly concerned about the preparation process for the listing of leasing companies. Earlier in the 2022 annual results briefing, I Love My Home said that the independent listing of Xiangyu has always been a clear strategic goal, and at the same time, preparations for the independent spin-off and listing of Xiangyu's business will be launched in 2023.
Rental housing REITs are moving towards normal development, and mergers and acquisitions have become a powerful weapon to expand market share
The performance of rental housing REITs is also positive.
In 2023, the cumulative amount available for distribution, rental income and other data exceeded expectations, and the robustness of rental housing REITs was highlighted.
Data source: corporate performance announcements, opinion index collation
According to the fund performance report, the annual cumulative available distribution amounts of China Resources Youchao REIT, China AMC Beijing Affordable Housing REIT, CICC Xiamen Anju REIT and Hongtu Innovation Shenzhen Anju REIT were 60.7614 million yuan, 55.053 million yuan, 57.3262 million yuan and 51.0963 million yuan respectively, with completion degrees of 125.3%, 110.99%, 103.89% and 108.92% respectively.
Data source: corporate performance announcements, opinion index collation
In terms of project operation, the underlying projects of the four funds have demonstrated stable operating capabilities, and the occupancy rate and rental collection rate have remained at a high level for a long time. In 2023, the occupancy rate of the underlying project remained above 90% for the fourth consecutive quarter.
Specifically, the occupancy rate of Yuanbo Apartment and Hengqi Apartment in Xiamen has remained above 99% for five consecutive quarters since the fund's inception. Except for a slight decline in Q3 2023, it will generally maintain an upward trend and hit a new high in Q4 2023.
In comparison, the occupancy rates of Youchao Sijing Community of China Resources Youchao REIT from the first four quarters of last year were 96.99%, 96.52%, 94.54% and 92.88% respectively. On March 21, China Resources Youchao REIT said that the occupancy rate of market-oriented operation projects does have seasonal fluctuations, but it will not have a substantial impact on the performance realization from the perspective of the whole year.
In terms of customer sources, the customers of the Chaosijing project are office workers along Metro Line 9, accounting for more than 70% of the project's customers. At the same time, based on the rental demand brought by the surrounding key industrial parks, there may be better support for tenants in the Chaosijing community this year.
Occupancy rate and rental unit price are the two key indicators for the long-term sustainable development of the project, and the rental unit price of the underlying projects of the fund will also perform steadily in 2023.
Data source: corporate performance announcements, opinion index collation
Note: If the overall rental unit price is not disclosed, the average rental unit price of the ground floor project is taken or calculated according to the formula quarterly rental income/(3 * construction area * occupancy rate).
Among them, the underlying projects of China Resources Youchao REIT and Beijing Affordable Housing REIT are significantly higher than those of the other two funds based on their urban and location advantages.
The rental unit price of the underlying assets of the four funds will show an upward trend in 2023. Compared with the beginning of 2023, at the end of 2023, the unit rental prices of the underlying assets of China Resources Youchao REIT, China AMC Beijing Affordable Housing REIT, CICC Xiamen Anju REIT and Hongtu Innovation Shenzhen Anju REIT increased by 5.01%, 4.46%, 7.86% and 0.21% respectively. It can be found that the rental unit price of the first three has increased significantly.
Judging from the data, the future rental growth of the underlying assets of the four funds is guaranteed to a certain extent.
Overall, the four rental housing REITs in 2023 have delivered good answers, which also confirms the stability of the development of the rental housing market.
This year, rental housing REITs will continue to usher in new members, and the pace of corporate application and issuance will accelerate, and the number and scale of rental housing REITs will be further expanded, injecting new vitality into the market.
On January 12, Guotai Junan Urban Investment Kuanting Rental Housing REIT was listed on the Shanghai Stock Exchange, becoming the fifth single rental housing REITs product in China. The fund raised 3.05 billion yuan, which is the largest rental housing REITs product issued at present.
The underlying assets include the Jiangwan Community held by Shanghai Chengchi and the Guanghua Community Project held by Shanghai Chengye, which can provide 1,719 and 1,234 units, with occupancy rates of 91.70% and 95.11% respectively as of September 30, 2023, both of which have been in operation for less than three years.
According to the opinion index, Jiangwan Community and Guanghua Community predict that the average rent unit price in the first year is 132.31 yuan/month/square meter and 136.88 yuan/month/square meter respectively, and the average recorded rent is 141.1 yuan/month/square meter and 145.1 yuan/month/square meter (construction area), and there is still room for upward adjustment from the rent ceiling in the first year.
In addition, at the beginning of this year, Shanghai New Huangpu said that it planned to use the Meilong Community Project in Minhang District, Shanghai as the underlying asset for the first application for the issuance of rental housing REITs, and in March, the Shanghai Stock Exchange accepted the application of the Jianxin Jianrong Home REIT project.
According to the fund's prospectus, the underlying assets of CCB Jianrong Home REIT include leasing projects in Beijing, Shanghai and Suzhou. As of the end of last year, the occupancy rate of the rental housing component of the three projects exceeded 90%. Among them, the Beijing and Suzhou projects have been in operation for a relatively short period of time, both of which are less than three years, and the Shanghai Xingfuli project has been in operation for more than three years, which means that CCB Jianrong Home REIT needs to break through the time limit of operation time to achieve listing.
Compared with the listed rental housing REITs products, the underlying assets of the declared fund have achieved a new breakthrough in the way of housing raising, and the underlying projects come from the stock assets of Jianxin Housing and Jianxin Housing Leasing in a market-oriented manner, and at the same time, they are not limited to a single city in terms of layout of cities.
Public REITs have built a listing platform for leased assets and promoted the market to achieve a closed commercial loop. According to the opinion index, there are currently rental housing projects in many provinces and cities in preparation. For example, Boyu has actively promoted the work of insurance protection, and as of the end of last year, 101,500 units have been included in the affordable rental housing. Under the huge scale of insurance, Vanke has expressed its willingness to issue rental housing REIT products more than once, and at the same time said at the 2023 performance promotion meeting that the apartment may officially submit application materials to the relevant state departments in about 2 weeks.
Source: Opinion Index Statistics
It is worth mentioning that CCB Housing Leasing Fund has been active in the long-term rental apartment asset trading market in recent years.
At the same time, the acquisition and acquisition of long-term rental apartment assets and asset transactions have become an important way for external enterprises to enter the housing rental market, and they are also an important way for leasing enterprises to achieve scale expansion. Among them, Ascott, Chengjia and other leasing companies have mergers and acquisitions during the reporting period, which also expands a large number of housing listings for enterprises. It should be noted that the asset acquirers mentioned in the chart include LaSalle, Brookfield, Chengjing Rental Group and other enterprises, which have launched corresponding housing rental operation brands for the mainland rental market.
The construction of rental housing has been refreshed, and the policy side has continued to improve the financial support system
In this year's government work report, it is once again proposed to increase the construction and supply of affordable housing, strengthen the construction of the housing security system, support the demand for rigid and improved housing, and solve the housing problems of new citizens and young people as key topics, and the development of the rental market has been highly valued.
Source: public information, opinion index collation
Under the guidance of accelerating the establishment of a housing system with multi-subject supply, multi-channel security, and simultaneous rental and purchase, the construction of rental housing in various regions will be accelerated in 2023. According to the data disclosed by the National Bureau of Statistics, in 2023, 2.13 million units (rooms) of affordable rental housing will be started and raised nationwide, exceeding the annual fundraising target, and 5.47 million units of affordable rental housing have been started and raised from 2021 to 2023.
Source: Incomplete statistics of the opinion index
Looking back on the policies and regulations related to the housing rental market issued at the central and local levels from the whole year to the first quarter of this year, involving policy cultivation, standardized supervision, housing construction and raising, tax incentives, financial support, provident fund support, incentives and subsidies, etc., focusing on both ends of market supply and rental demand, and promoting the high-quality development of the housing rental market.
At the beginning of this year, Article 17 of housing rental finance was officially implemented, which means that leasing enterprises will receive further financial support in the process of project construction management, effectively alleviating the problems of enterprise financing.
The "Opinions" have launched 17 measures to cultivate and develop the housing rental market by strengthening the innovation of housing rental credit products and service models, broadening the diversified investment and financing channels of the housing rental market, and strengthening and improving the financial management of housing rental. At the same time, it clarifies the credit support for leasing enterprises with different business models.
At the local level, all localities have implemented policies according to the city to vigorously support the development of specialized housing rental enterprises and promote the standardized, large-scale, professional and institutional development of the rental market.
For example, starting this year, Nanjing has added bonus points for rental housing to its points-based settlement policy, supported Guangzhou and Shenzhen to build rental housing on a large scale in combination with the transformation of urban villages, Shenzhen issued new regulations to regulate the behavior of second-hand landlords and houses in the house, and Beijing has included housing rents in supervision for the first time.
In addition, in terms of promoting the growth of rental demand, many provinces and cities have optimized the rental housing withdrawal business, including Beijing, Guangzhou, Shanghai, Chengdu, Nanjing and other cities.
With the frequent introduction of financial, land, fiscal and taxation support policies, the development model of industry investment, financing, management and withdrawal has gradually become clear, and the commercial cycle of the housing rental market has been opened, which will attract more market players to participate in the rental market, and the scale of the domestic rental market is expected to grow further.
The rental market is gradually gaining popularity, and companies are quickly seizing the market
In terms of project openings, the Guandian Index selected 22 housing rental companies as samples to monitor the opening of housing rental products.
Source: Sentiment Index
According to the statistics of the opinion index, a total of 166 new leasing projects will be opened in the sample enterprises in 2023, a year-on-year increase of 61.17%, and leasing companies such as real estate enterprises, hotels, and entrepreneurship companies have opened stores. Among them, Anxin Apartment, Chengjia Apartment, Guanyu, Lingyu and Boyu ranked among the top five in the number of newly opened projects, accounting for 15.66%, 13.86%, 12.65%, 8.43% and 7.83% respectively.
The newly opened products include white-collar apartments, blue-collar apartments and serviced apartments, etc., and the company's diversified product system has gradually taken shape.
It is worth mentioning that Ziru, which is not in the statistical sample, also has a good performance in promoting the entry of projects into the market. According to Ziru Asset Management, a total of 77 long-term rental apartment projects will be opened in 2023, and large-scale rental communities will be landed in 5 cities, with more than 7,000 housing units.
At the same time, in the first quarter of this year, the enthusiasm of enterprises to open stores continued to rise, and leasing companies such as China Merchants Eden, Boyu, Guanyu, Chengjia Apartment and Bairuiji continued to launch new projects. The number of newly opened projects of the sample enterprises was 50, a year-on-year increase of 72.41%.
According to the opinion index, the expansion and opening of stores by enterprises is often related to market demand and enterprise development confidence, and it can also be judged from the continuous growth of the number of projects entering the market that leasing companies are optimistic about the development of the market.
Data source: Opinion Index statistics
Judging from the pie chart, the number of newly opened leasing projects in Shanghai continues to rank first in the overall number of opening projects in 2022, 2023 and the first quarter of this year. At the same time, Beijing, Shenzhen, Chengdu, Guangzhou and Hangzhou are also cities with long-term key layout of leasing companies, which also confirms that the demand for rental housing in first-tier cities and new first-tier cities is stronger.
Data source: Opinion Index statistics
From the monthly sample enterprise project entry situation of the opinion index, it can be found that the boom of leasing companies to open stores is mainly concentrated around the Spring Festival holiday and the graduation season, and in 2023, leasing companies will focus on launching new projects from March to June and September to November.
From January to March this year, the number of projects entering the market continued to increase. According to the opinion index, it may be due to the concentrated release of the demand for new urban youth and rent replacement around the Spring Festival holiday, and leasing companies attract new tenants to sign contracts through the preferential policies for new openings and the Spring Festival discounts.
Data source: National Housing Price Network, opinion index collation
Note: The 10 cities include Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, Xiamen, Nanjing, Tianjin, Chengdu and Wuhan
Comparing the average monthly residential listing rent in the ten cities in the past two years, it can be clearly found that the average rent level in many months in 2023 is higher than that in 2022, which also shows that the effective demand of the housing rental market last year is better than that in 2022, and the market activity has increased significantly.
At the same time, from the perspective of the monthly rent trend, the rent fluctuations in the past two years are basically the same, during the Spring Festival holiday, the population outflow in key cities, the rent is on a downward trend, and during the graduation season, the demand for rental housing rises, and the rent rises simultaneously.
In addition, the rental market has shown a new growth trend this year, with average rents in the first quarter also better than the previous year.