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◎ Source | Real Estate Spy (ID: real-estate-spy)

As we all know, Shanghai was once the strategic high ground where many dark horse real estate developers "set up camp" on their way to making hundreds of billions of yuan. Dahongqiao was the "Jerusalem" that they made a pilgrimage to and were proud of.

The real estate market has continued to adjust sharply in the past two years. Those real estate developers that have been frustrated or in danger have already done so and returned home to the place where they once prospered to accumulate energy and fight again in the future.

In the hot summer of August,Yesterday (August 7) ​​ShanghaiLand auctionA rare reappearance of "The King's Feast"，After eight years, it once again broke the record of "National Unit Price King", with a floor price of 131,000 yuan/㎡！

The record breaker of this milestone is Greentown, which continued to aggressively acquire land against the market trend. After reaching the peak with a premium rate of 30%, it finally defeated many other powerful state-owned enterprises such as Poly, China Resources, China Overseas, and China Merchants through a lottery.

"When someone is successful, someone else will be frustrated." Last week, an insider in the Shanghai industry broke the news.China Merchants Bank is very willing to take over the Xuhui Riverside site after Xiaomi withdraws。“If China Merchants Bank stops acquiring land in the central city, it will be marginalized in Shanghai.”

Source: Real Estate Spy Gallery

According to relevant disclosures, China Merchants Shekou was not alone in bidding for the "original small headquarters plot", but also brought in Xuhui Urban Investment.

Judging from its background, Xuhui Urban Construction Investment is a state-owned enterprise that is a "local boss" in the urban construction field of Xuhui District, Shanghai. China Merchants Group has brought in Xuhui Urban Construction Investment to show its strength, which not only demonstrates its ability to acquire land, but also implies its confidence in winning.

Unexpectedly, the opposite happened.

Last month, China Merchants Shekou just took over the Xuhui Changqiao project, namely the XH315-10 and XH313-16 plots in Changqiao Street, Xuhui District, with 100,000 square meters of commercial housing and 835 units available for sale, of which the area of ​​small and medium-sized units accounts for no less than 50%.

It is also reported that in May this year, Shanghai Real Estate and Xuhui Urban Investment Group spent 7.9 billion yuan to acquire the land for the Xuhui Changqiao project. Now, with the involvement of China Merchants, China Merchants holds 80% of the shares of the Xuhui Changqiao project, while Xuhui Urban Investment Group holds 20% of the shares. It is expected to create a "Xi" series product with a selling price of 115,000 yuan per square meter.

According to Shanghai real estate media, the Xuhui Changqiao section is magical. All you can see are high-voltage lines and old and dilapidated houses. It is said that its development is not as good as Xuhui Binjiang, Huajing, etc. However, it had its highlight moment in 2020. Thousands of people participated in the lottery and the houses were sold out in one day. This was mainly because compared with other sections, the price here was less than 80,000 yuan at that time.

Now that investment has been attracted, the price of the Xuhui Changqiao section has immediately risen to a new high of "110,000+", becoming one of the hotly discussed topics in the Shanghai circle.

For China Merchants Shekou, the Xuhui Changqiao project is a project with high output value, but it is far from enough. It tied up with Xuhui Urban Investment to bid for the "former Xiaomi headquarters" project, undoubtedly hoping to make persistent efforts and get more, but ultimately miscalculated.

In addition to the Xuhui Changqiao project, according to people familiar with the Shanghai real estate industry,China Merchants has two other projects in Pudong, namely China Merchants Zhenjing and China Merchants China Travel Lanyue, plus Baoshan TOD China Merchants Times Lezhang and Songjiang Sijing TOD China Merchants Times Chaopai, mainly these four projects.There will be another Fengmao villa project in the second half of the year, plus the Xuhui Changqiao project, so that’s basically it.

The aforementioned insider said,The problem with China Merchants in Shanghai now is that most of the goods are concentrated in the suburbs or non-core areas. It is difficult to sell them to the core areas of the city center. The flow rate is slow and the profit margin is not high, unlike China Overseas, which only takes land in core areas (Xintiandi, Xuhui Riverside).。

According to CRIC's monitoring and statistics, in 2023, China Merchants Shekou won the "double crown" of the Shanghai real estate market with a full-caliber sales of 64.557 billion yuan and equity sales of 47.167 billion yuan, surpassing Poly, Vanke, China Resources Land, Greentown and others.

Among them, Xiangyu China Merchants Park 1872 had a sales volume of 10.634 billion yuan, ranking third in the 2023 Shanghai real estate sales list TOP30; China Merchants Suhexi sold 9.177 billion yuan, ranking fifth; China MerchantsPhase 2 of Xiangyu Panlong Mansion sold 7.372 billion yuan, ranking 18th.

Also referring to CRIC data, in 2023, China Merchants Shekou's national total sales reached 293.63 billion yuan, of which the Shanghai region contributed nearly 22% of the sales, which is more than 1/5 of the share; the equity sales reached 185.2 billion yuan, of which the Shanghai region contributed 25.46% of the sales.

Since the beginning of this year, China Merchants Shekou has seriously lost momentum in the Shanghai property market, with monthly sales in the first four months declining sharply. There was a slight improvement in May, but despite this, the total sales in the first five months continued to lose the sales crown. In the first half of this year, its Shanghai sales were 12.977 billion yuan and its equity sales were 8.9 billion yuan, both ranking fourth.

Looking at the first seven months, China Merchants Shanghai's equity sales amounted to 9.55 billion yuan, ranking it down to fifth place. Compared with the same period last year when it was firmly at the top of the Shanghai real estate market with 26.283 billion yuan, the sales decline was quite serious.

Continuing to refer to CRIC data, China Merchants Shekou's full-caliber sales in the country in the first seven months were 116.82 billion yuan (last year ago: 186.56 billion yuan), a year-on-year decrease of 37.4%; equity sales were 81 billion yuan (last year ago: 115.8 billion yuan), a year-on-year decrease of 30%, of which the proportion of equity sales in the Shanghai region has dropped to 11.8%.

Recently, China Merchants Shekou also disclosed its 2024 interim performance report, with revenue of 51.27 billion yuan in the first half of the year, a slight decrease of 0.33% year-on-year, operating profit of approximately 2.93 billion yuan, a year-on-year decrease of 40.18%, and net profit attributable to shareholders of the parent company of 1.417 billion yuan, a year-on-year decrease of 34.17%, mainly due to the decline in gross profit margin of development business projects.

Last year, the gross profit margin of China Merchants Shekou's development business was 17.08%, down nearly 4 percentage points year-on-year. The gross profit margin of the East China region, which contributed the highest revenue (nearly 50 billion yuan) last year, was 15.88%, also down 2.38 percentage points year-on-year, lower than the overall development gross profit margin level last year.

As the gateway to the entire East China region, Shanghai is of vital importance to any leading real estate developer in terms of output value and sales. China Merchants Shekou, which held the "double crown" in Shanghai last year, has continued to lose the sales crown this year due to the lack of good projects in the city center. Whether it can replenish its inventory in time will be particularly critical.