| industry perspective of affordable rental housing is not included in the concentration management, enterprise can benefit from?

2022-07-08 0 By

On February 8, 2022, the People’s Bank of China, silver insurance regulatory commission issued “about affordable rental housing related notice loan is not included in the management of real estate loan concentration, clear of affordable rental housing projects related to the loan into the real estate loan concentration management, encourage the banking financial institutions to increase support for affordable rental housing development.The landing of the policy, which will have a positive effect on the housing enterprises?What changes will it bring to the industry’s development trends?From the content of the notice, it is clear that the relevant loans of affordable rental housing projects with project confirmation are not included in the concentration management of real estate loans, which is consistent with the general tone of “housing is not speculation” and “both rent and purchase”.On January 20, 2022, the National Work Conference on Housing and Urban and Rural Development proposed that 2.4 million units of low-income rental housing should be built each year.The further clarity of the central bank policy, effectively enhance the motivation of housing enterprises to apply for affordable rental housing loans;At the same time, banks’ issuance of relevant loans is not bound by the concentration management index, and there is sufficient space to increase credit for affordable rental housing projects, so as to speed up the construction of affordable rental housing.In fact, at present, many banks have increased the credit support for the construction and operation of affordable rental housing. For example, CCB is one of the earliest financial institutions supporting the construction of affordable rental housing in China.By the end of 2021, CCB had granted more than 100 billion yuan of credit and invested more than 43 billion yuan, involving more than 400 affordable rental housing projects.On January 26, 2022, CCB also signed a cooperation agreement with Poly Group to explore the life-cycle business model of low-income rental housing from incubation, construction and operation to public offering of REITs.In addition to affordable rental housing loans, how public REITs connect with affordable rental housing has also become the focus of local policies recently. For example, on January 19, 2022, Wuxi issued the Implementation Opinions of The Municipal Government Office on Accelerating the Development of Affordable Rental Housing.Among them, it mentioned supporting the construction and renovation of affordable rental housing and financing by operating enterprises issuing real estate investment trusts (REITs).It can be seen that in the future, with the support of multi-directional financing in the field of affordable rental housing, real estate enterprises will be guided to adjust their investment layout to a certain extent, and at the same time, it does not rule out that some real estate enterprises take the initiative to actively promote affordable rental housing.To participate in the construction of indemnificatory rental housing and enjoy the preferential policies of relevant policies, the housing enterprises should first clarify the definition of indemnificatory rental housing and obtain the confirmation of indemnificatory rental housing project.According to the Opinions of The General Office of the State Council on Accelerating the Development of Low-income Rental Housing, low-income rental housing mainly solves the housing problems of new citizens and young people, and the building area is not more than 70 square meters, and the rent is lower than the rent of the same location and the same quality market rental housing.On January 18, 2022, Shanghai issued the “Measures for The Identification of Affordable Rental Housing Projects in Shanghai (Trial)”, which further clarified the housing type standards for the newly implemented affordable rental housing projects, that is, the building area of houses of less than 70 square meters shall account for no less than 70% of the total building area of the project.According to the identification procedures of affordable rental housing in Shanghai, housing enterprises can obtain relevant confirmation through the existing project and the new implementation of the project identification in two ways.Existing projects refer to rental housing projects that have been completed or are under construction (including those going through construction procedures) after compliance approval before the implementation of the Measures.Through this process, housing enterprises can transform the qualified rental housing projects they have obtained into affordable rental housing projects, and then enjoy preferential policies, but at the same time the rent is estimated to be about 15%-20% lower than the market price.In the newly implemented project identification procedure, it includes general identification procedure and simple identification procedure.The simple identification procedure mainly applies to the commercial housing construction indemnificatory rental housing project, and the newly built project whose construction content is (indemnificatory) rental housing specified in the land transfer contract.For example, Shanghai requires no less than 15% of the newly sold land for commercial housing to be allocated for self-owned government-subsidized rental housing.However, it should be noted that in this way of transfer, state-owned enterprises are the main investors, and private enterprises are limited in participation.In general, as the identification method of affordable rental housing has been recently issued, and the actual size of the identification project owned by real estate enterprises is not large, the policy benefits they can receive are relatively limited.In particular, private real estate enterprises may mainly play a supplementary and auxiliary role in the field of affordable rental housing besides state-owned enterprises and central enterprises. The specific effect of financial support in this field in the future remains to be seen.Real estate enterprises with strong agent construction and operation capacity can actively try the layout of this field. Although the scale of real estate enterprises’ participation in affordable rental housing is not large, some real estate enterprises still actively cooperate with the government to try the field.According to two batches of “Replicable and Promoted Experience Lists for Developing Affordable Rental Housing” released by the Ministry of Housing and Urban-Rural Development in November 2021 and February 2022, a number of housing enterprises, including Vanke Boyu, China Resources Youchao and Longhu Guanyu, participated in the construction of affordable rental housing through collective operational construction land.Participation methods include setting up joint venture companies, operating after the whole lease, entrusted management and so on.For the Chengshou Temple project in Beijing, the village collective economic organization and Vanke will establish a joint venture as the main operator of the project, and Vanke will be responsible for all construction costs and get the right of management and profits for 45 years after the completion of the project.Different from land acquisition, Vanke only needs to invest construction and development costs in the early stage, which reduces the rent burden and expands the business scale.In addition, in the boom of affordable rental housing, housing enterprises with strong agent construction capacity also welcome good news. Such housing enterprises can provide relevant agent construction services for the government, such as Greentown management and Zhongyuan Construction Industry.In addition, enterprises with outstanding operation and management capabilities of rental housing can also actively participate in the later operation of affordable rental housing, such as Vanke Boyu, Longhu Guanyu, Xuhui Lingyu and so on.Overall, the adjustment of the real estate loan concentration management, further guide the future business layout direction of housing enterprises.It is worth noting that Qingke, known as the first long-term rental apartment in early 2022, has filed for bankruptcy, revealing that the profit space of market-oriented rental housing is still limited.While affordable rental housing, although enjoying preferential policies, is also in a low profit stage due to low rent pricing.In this context, housing enterprises involved in affordable rental housing should adjust their attitude and prepare for the era of low profits in real estate.In addition, the launch of a large number of affordable rental housing will also squeeze market-oriented rental housing. For the layout of market-oriented rental housing housing enterprises, it is more important to do a good job in product differentiation and improve their own operation capacity.Don’t blame me for not telling you!Keep an eye on these sections in 2022……Secondhand the room weekly | 10 city first volume to drop, Qingdao, hangzhou month-on-month fall into 4 capital markets return to rational, content companies listed to slow