What does Li Ka-shing's frequent selling of real estate mean?

Recently, it was reported that Li Ka-shing intends to switch to Century Hui, a large-scale complex in the Mainland. This commercial project is located in Lujiazui, Pudong, with a total construction area of 360,000 square meters and a first-class location. Located at the intersection of Dongfang Road and century avenue, four subway stations are built on it. It is planned to change hands at a unit price of 70,000 yuan and a total price of about 20 billion yuan. Why does Li Ka-shing frequently sell mainland properties? Are you really bearish on the mainland property market? In fact, Li Ka-shing represents a group of Hong Kong-funded real estate developers, whose fate and destiny in the mainland property market have changed greatly in the past 20 years.

In recent years, Li Ka-shing has frequently sold off mainland properties. According to incomplete statistics, if Century Hui sells other assets, including supermarkets, ports, energy, etc., the amount of mainland assets cashed out by Li Ka-shing in the past three years is as high as several hundred billion yuan, but no new investment has been made in its subsidiaries during this period. As the richest man in Asia and a traditional real estate tycoon, every time Li Ka-shing sells a large amount of domestic real estate, it always causes a heated discussion. For example, 2013,71600,000 yuan was sold to Shanghai Lujiazui Oriental Exchange Center, 201326 million yuan was sold to Guangzhou Xicheng Duhui Plaza, and 201472 million yuan was sold to Beijing Yingke Center. Why does Li Ka-shing frequently sell mainland properties? Are you really bearish on the mainland property market?

First, the land price is too high.

In recent years, Li Ka-shing has basically not taken land in the Mainland, and one of the important reasons is that the land price is too high. Large Hong Kong-funded housing enterprises have been laying out first-tier cities and a few core second-tier cities for many years. However, in recent years, housing prices and land prices in these cities have continued to rise rapidly, and the increase in land prices is higher than housing prices. Especially after 20 1 1, third-and fourth-tier cities continued to slump, and large developers were forced to adjust their layout strategies and return to first-tier cities. The competition in the homestead is extremely fierce, and "flour is more expensive than bread" has become the norm. Hong Kong-funded housing enterprises with a strong sense of risk prevention and control simply cannot get land in the open market.

Second, it is not easy to hoard land.

If you look closely, you will find that many projects of large-scale Hong Kong-funded developers in the Mainland, especially large-scale projects, often need to be developed for many years, and their development cycle is much longer than the industry average. Take Century Exchange as an example. In 2004, it was acquired at the floor price of10.2 million yuan. 10 years later, it is still not completed. There is a shopping mall and two office buildings, and the project scale is not particularly large. For such a high-quality location, the land price now exceeds 50 thousand. Over the years, some projects in Li Ka-shing have often been questioned by the media about land hoarding. However, in recent years, the regulation and management of land in the mainland has become more and more strict, and the project has been delayed for a long time or failed to be completed.

Third, the advantage is no longer.

In the 1990s, urban construction and real estate development in the Mainland lacked capital, experience and technology. At that time, Hong Kong-funded developers were the key customers for attracting investment. Therefore, Hong Kong enterprises can often obtain high-quality projects at very favorable land prices and other conditions. 1998 after the housing reform, the mainland real estate market developed rapidly, which fostered and gave birth to a number of large-scale real estate enterprises in the mainland. Especially in recent years, Vanke, Greenland, Evergrande, China Shipping and Poly have developed rapidly. At present, there are basically no traditional Hong Kong businessmen in real estate giant clubs. In addition to holding properties for commercial purposes, there are still some advantages, and the comparative advantages originally possessed by traditional Hong Kong enterprises have disappeared.

To sum up, with the rapid development of the real estate market in China, the growth of a number of high-quality real estate enterprises in the Mainland, the strictness and standardization of land transfer and management, the rapid rise of land prices in first-tier cities, the passing of golden decade, and the decline of industry profit rate, many traditional Hong Kong-funded developers, including Li Ka-shing, have been unable to continue to purchase and develop land in the Mainland, with fewer and fewer projects, the scale of operation will inevitably continue to shrink, and the allocation of institutions and teams will inevitably be compressed. Even for high-quality properties, the value of holding and operating has dropped significantly compared with before.

This is only the internal cause of the real estate sector, and Li Ka-shing's selling and divestment may also involve factors other than real estate. For example, China's economy has entered a new normal, and the economy has changed from high growth to medium growth. Compared with the previous 10-20 years, the investment opportunities and value in the mainland have decreased. Li Ka-shing has been developing in a diversified and transnational way, and real estate is just one of the industries. It is normal to shrink the mainland real estate business, expand other businesses and increase international investment in Britain and other countries.

In recent years, Li Ka-shing has sold many mainland properties, which is the result of many factors. Li Ka-shing has invested in the mainland real estate market for more than 20 years, from surging clouds to light winds, from the legendary swordsman to retirement, which is actually a mirror, reflecting that the real estate industry in China has gradually grown from a child to a teenager, and now it has entered youth and even middle age.

(The above answers were published on 20 15-08-05. Please refer to the actual situation for the current purchase policy. )

Comprehensive and timely real estate information, click to view.