state-owned assets began to buy at the bottom everywhere
2024-09-05
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recently, many institutions have released reports on the real estate bulk transaction market in the first half of 2024. among them, the report from colliers international showed that a total of 149 bulk transactions were recorded nationwide in the first half of the year, with a total transaction amount of nearly 94.5 billion yuan.from a regional perspective, the transaction amount in east china is about 52.3 billion yuan, leading by a large margin; from a city perspective, shanghai's real estate bulk transaction amount in the first half of 2024 is about 45.9 billion yuan, accounting for 48.6% of the national transaction amount, leading the national real estate bulk transaction market; from a property type perspective, office properties are still the largest subject of real estate bulk transactions, accounting for nearly 37% of the total, with a transaction amount of about 34.7 billion yuan. from the perspective of buyer type, domestic capital accounts for the majority, with various capitals, industrialists, mysterious institutions, etc., including local state-owned assets.recently, many local state-owned assets have begun to intensively buy up scarce office assets in core sectors, and the destination is the same city: shanghai.some people can't help but ask, what are these state-owned assets doing? why are they all buying office buildings in shanghai? in short, during economic fluctuations, companies may sell high-quality assets that are difficult to purchase at ordinary times at low prices in order to survive. this provides investors with financial strength with the opportunity to purchase at low prices, that is, "bottom fishing". for sellers, this behavior is a self-help measure in the current environment, while for buyers it is a risky investment strategy that requires accurate judgment of the market and sufficient financial preparation. therefore, there is a phenomenon of local state-owned assets increasing their positions against the trend.purchase high-quality assetsconducive to maintaining and increasing the value of state-owned assetsone of the evaluation criteria of local governments for state-owned assets, especially venture capital platforms, is asset preservation and appreciation. in other words, "no loss" has become a key consideration for many state-owned assets when conducting project venture capital.under this logic, local state-owned assets will become particularly cautious when evaluating assets and will definitely choose better quality assets to invest in or purchase.recently, local state-owned assets can be said to have set off an investment boom: some have increased industrial investment, mainly to accelerate the integration of local industrial resources and enhance industrial synergy, which is becoming a new trend; some have taken over listed companies. by acquiring listed companies with good technology or market prospects, local state-owned assets can promote the optimization and upgrading of local industrial structure, better regulate the local economy and promote stable growth of the local economy.purchasing office buildings is more conducive to maintaining and increasing the value of local state-owned assets.some people say that in the long run, there are only two most valuable assets in the world: equity in high-quality companies and houses in core areas of core cities. behind these two assets, there is a strong control over scarce resources in society, and this control is constantly growing.if the above view is correct, some local state-owned assets do have a keen eye.recently, the state-owned assets supervision and administration commission of the xinjiang uygur autonomous region acquired huaxu international building, an office building located in a prime location in central shanghai.the office building is located in the most central area of shanghai, only about 100 meters away from people's square subway station and adjacent to shanghai shimao plaza, the starting point of nanjing road pedestrian street.the former owner of huaxu international building was xinjiang sanlian enterprise development group co., ltd. the company was once a major taxpayer among xinjiang private enterprises and invested in and built many projects in many places across the country, including its own property "shanghai huaxu building" which cost 600 million yuan to develop and build.why sell such a good asset? the specific reason is unknown, but it is worth noting that in 2023, xinjiang sanlian changed from a private enterprise to a state-owned enterprise. it is understood that this is not a separate acquisition. huaxu international building, as an important asset of the parent company, was also changed to the xinjiang uygur autonomous region state-owned assets supervision and administration commission.for enterprises, the benefit of being acquired by state-owned assets is that their financial resources have more reliable support and they can more easily obtain financial support and resource allocation from the government, which has a positive impact on solving liquidity problems, reducing financing costs and expanding business scale.in addition, it means that the company has the endorsement of the government, which will improve its market credibility and help attract more partners and customers, especially in bidding for large projects.moreover, these assets usually attract high-quality tenants and provide stable rental income. during economic recovery or prosperity, rental levels may rise, bringing higher returns to state-owned assets.as cities continue to grow and improve, the value of land and buildings in core locations tends to rise over time, especially when supply is limited, as growing demand drives asset values higher.therefore, this can indeed be regarded as one of the effective ways to maintain and increase the value of state-owned assets.
in order to improve the occupancy rate,while carrying out asset securitization,further strengthening asset management capabilitieshigh-quality assets can maintain and increase their value, but how to manage them is also very important. for office asset management, the core lies in cash flow, which is generated by occupancy rate and tenants.after acquiring office building assets, local state-owned assets must first ensure the occupancy rate.last month, henan state-owned assets acquired shanghai putuo xingguangyao building from yuyuan group, a listed company of fosun group. the asset acquisition was officially launched last year, with a total transaction amount of about 1.515 billion yuan.next, the task facing henan state-owned assets is to recruit tenants. it is understood that the henan provincial office in shanghai, the liaison offices of many cities, counties and districts in henan, the branches of henan state-owned enterprises in shanghai and various business associations may choose to move in at that time.at present, the early stage leasing has also been launched, and more than 20 floors have expressed their intention to lease.but it should be noted that according to statistics from jll, the total net absorption of grade a public property markets in 40 major cities across the country in the second quarter of this year was 650,000 square meters, a decrease of 20.2% month-on-month. among the 20 key cities across the country, the grade a vacancy rate in 10 cities was higher than 30%. among the first-tier cities, except for beijing, the vacancy rates in shanghai, guangzhou and shenzhen were all in the range of 20%-25%.this is consistent with the recent demand contraction perceived by all parties in the market. the internal logic of the obstruction of demand release caused by the adjustment of the industrial chain continues, and the trend of reduction and withdrawal of leases by major tenants in traditional industries has further expanded.jll also disclosed in the report that in most cities across the country, the office market is showing two trends, one of which is "re-centralization". as the rent gap between core business districts and non-core areas narrows, some tenants seize the rental window to upgrade to high-quality office space in core areas, showing a re-centralization migration.therefore, whether it is the huaxu international building located in the central urban area of shanghai acquired by xinjiang state-owned assets, or the putuo xingguangyao building acquired by henan state-owned assets, they must seize this opportunity.at present, many state-owned enterprises are caught in a dilemma of leasing and selling in the face of a severe market. the reason is that on the one hand, they are subject to the price restrictions guided by the state-owned assets supervision and administration commission and cannot compete with private enterprises in price wars; on the other hand, they are relatively lacking in the sophistication of market-oriented operations. however, state-owned assets can effectively improve these problems by using digitalization and information technology.to do a good job of asset management, in addition to increasing occupancy rate, another option is securitization.according to dtz, more than a year ago, a state-owned enterprise buyer who is 100% controlled by ningbo qianwan new area management committee won the d1 office building project of shanghai hongqiao world center for rmb 510 million. the office building was originally the shanghai headquarters of a private real estate company. after it was purchased in 2019, it was renovated at a high cost and issued quasi-reits in 2020.since the pilot of infrastructure reits in 2020, it has become more and more mature after several years of development. on july 26, the "notice of the national development and reform commission on comprehensively promoting the regular issuance of real estate investment trust funds (reits) projects in the infrastructure field" was officially released, marking that infrastructure reits have finally officially entered a new stage of regular issuance from the pilot stage.in the field of consumer infrastructure, there are many new faces, such as department stores, shopping centers, commercial blocks, etc., which are no longer limited to shopping centers.hotels and commercial office buildings that are physically inseparable from consumer infrastructure and that belong to the same sponsor (original beneficiary) can also be included in the underlying assets of the project.
although there are currently restrictions on the proportion of building area, the total proportion of the building area to the total building area of the underlying assets shall not exceed 30% in principle, and shall not exceed 50% under special circumstances, but it has also opened a new chapter in the securitization of office building assets.accelerate industrial transformation and promote industrial upgradingattracting investment is a major problem for the government. a staff member of a local investment platform complained: enterprises are having a hard time, and the government is also having a hard time. there are fewer and fewer companies willing to increase leverage for expansion, and the pressure on local investment promotion has been increasing in the past two years.indeed, in order to break through the bottleneck of attracting investment, the government has taken many measures. for example, some provinces have abolished the investment promotion departments within the government and established professional investment promotion companies to undertake this function.recently, a business investment promotion staff member of a local life science park has become the representative of the local government's business investment promotion department in developing and negotiating projects. the business investment promotion staff member comes from a private institution that provides light-asset business investment services purchased by the government.in addition, the government has been leading local state-owned assets to purchase office buildings and other assets in core areas of first-tier cities, utilizing the various resources of first-tier cities to open new windows for overseas investment promotion, thereby accelerating industrial transformation and promoting industrial upgrading. this has also been a common practice for many years.local state-owned assets owning high-quality properties in first-tier cities can enhance the brand image of the region. this not only demonstrates the strength of the local economy, but also shows that the local government or local enterprises attach importance to and have confidence in their own development and foreign cooperation, thereby attracting the attention of potential investors. as the saying goes, if you can't beat me, then join me first, build a nest first and then attract the phoenix.the purchased office buildings are used as investment attraction platforms to provide high-quality office environments for settled enterprises. this is very attractive to enterprises that wish to set up branches or headquarters in first-tier cities, as first-tier cities tend to have more mature and efficient business ecosystems.places like jiaxing, yuyao, quzhou in zhejiang and xuyi in jiangsu have purchased office buildings in shanghai, hoping to achieve a "reverse enclave" effect.in addition, owning office buildings in the core business districts of first-tier cities can help attract companies in the same or related industries to gather together, forming an industrial agglomeration effect. this effect can promote information exchange, resource sharing and technological cooperation, which is very beneficial to the growth and development of enterprises.if local state-owned assets succeed in attracting well-known or influential enterprises to settle in this way, it will have a good demonstration effect and attract more enterprises to consider investing in the region.in order to attract high-quality resources such as talent, business, and capital in the yangtze river delta centered on shanghai, the sino-italian ningbo eco-park in ningbo qianwan new area purchased an office building in shanghai hongqiao business center as a bridgehead for the park in shanghai.it is precisely because of these proven success cases that batches of local state-owned assets such as xinjiang state-owned assets and henan state-owned assets have been attracted and promoted to move south to seek gold.
