Colliers Real Estate executives collectively resigned. Real estate run encountered a "sudden brake"?

Text: Chen Shuwen Zhu Yun

ID: BMR2004

News of the resignation of Colliers Real Estate Chairman Li Gang spread like wildfire in the real estate circle.

On October 27, a reporter from "Business School" called Colliers Real Estate regarding the news of the resignation of Colliers Real Estate Chairman Li Gang. He learned from relevant company staff that not only Chairman Li Gang, but also the Vice President Liu Jingjie, Assistant President Wu Qing, and Assistant President Xia Yang have also resigned. The staff member told reporters that the real estate group is undergoing internal reforms and the specific personnel change information has not been updated.

In early 2018, Colliers Holdings Group (hereinafter referred to as "Colliers Holdings"), the parent company of Colliers Real Estate, formulated a five-year development plan from 2018 to 2022. The plan clarified that among many sectors, the real estate group will serve as the The holding group’s leading industries and core profit growth points in the next five years.

Under the new five-year plan, Colliers Holdings obviously has high hopes for the development of its real estate business. What is the reason for the large number of Colliers Real Estate executives leaving? Does it mean that Colliers Holdings will divest its real estate business? How to deal with the management problems caused by the departure of core management? In this regard, "Business School" sent a letter to Colliers Holdings, but as of the date of publication, no reply has been received.

Real estate executives resigned en masse

When I opened the official website of Colliers Holdings, I found that the management team column of Colliers Real Estate was blank.

As stated by Colliers internal staff, Colliers Real Estate Chairman Li Gang, Vice President Liu Jingjie, Assistant President Wu Qing, and Assistant President Xia Yang have resigned. The other party told reporters that the real estate group is undergoing internal reforms, and the specific personnel change information has not been updated.

The above-mentioned senior executives also participated in Colliers Real Estate’s 2019 annual work summary meeting on January 22, 2020, and summarized and reflected on the 2019 work tasks of this function and project, and their plans for 2020. The work was planned and prospected.

At the work summary meeting, Li Gang summarized the highlights and regrets of the real estate group's operations in 2019 from the aspects of organizational building and performance achievement, saying that the real estate group spent six months in 2019 to promote high-quality The team formation, system establishment, rights and responsibilities system, three-year strategy, comprehensive budget, and historical problem resolution have been completed, and the operation of each project is also remarkable.

Information shows that Li Gang has nearly 16 years of experience in real estate development. He has worked at China Overseas Real Estate for 8 years and Longfor Group for 8 years, reaching the highest level of general manager of Longfor Suzhou Company.

At the end of 2017, Li Gang joined CIFI Group and served as general manager of CIFI Nanjing Regional Business Unit. In June 2019, he resigned from Nanjing CIFI and began to serve as chairman of Colliers Real Estate.

After Li Gang entered Colliers Real Estate, the real estate business accelerated significantly. In the public auction market, Gaoli began to gradually exert its strength.

In May 2019, Colliers Real Estate won the land plot in Liuyang, Liuyang City, and quickly launched the project within 5 months. The project covers an area of ??350,000 square meters (527 acres), with a total construction area of ??1.3 million square meters, and a total investment of approximately 7 billion yuan. The project is an urban complex integrating five-star hotels, shopping malls and high-end residences.

In September 2019, the company won a land parcel in Yangzhou after 297 rounds of bidding. The total transaction price was 230 million yuan, and the floor price was as high as 8,530 yuan/.

In April 2020, Colliers Real Estate won the Hexi Zhong G02 plot for 790 million yuan, with a transaction price of 42,398 yuan per floor area! This is almost the same as the floor price of Wang Haiyue Garden in central Hexi Province, which is 42,561 yuan per unit. It is the highest land price in history.

With business efficiency increased significantly and project operations also achieving remarkable results, what are the reasons for the large number of Colliers Real Estate executives leaving?

In an interview with a reporter from "Business School", Shanghai Zhongyuan Real Estate Market Analyst Lu Wenxi believed that if Colliers Holdings reforms its real estate business, personnel adjustments may be unavoidable. Make personnel transfers for some employees who do not fit well with the group's culture or strategic requirements.

"If personnel are transferred, the entire management structure, including the original subordinates, will also change. Short-term company operations may also be affected to some extent, and turmoil seems inevitable." Lu Wenxi said.

Some clues can be found from Li Gang's development requirements for Colliers Real Estate and Colliers Holdings' high hopes for the development of its real estate business.

In 2019, the management team of Colliers Real Estate held a strategic planning meeting and proposed the "Colliers Real Estate Three-Year Strategy" to become a quality growth real estate company.

Li Gang hopes to build Colliers Real Estate into a "small but beautiful" enterprise that customers trust and the industry respects.

In early 2018, Colliers Holdings, the parent company of Colliers Real Estate, formulated a five-year development plan for 2018-2022. The plan clarified that among many sectors, the real estate group will be the leading industry and core benefit of the holding group in the next five years. growth point.

On March 1, 2019, Colliers Holdings entered into a strategic cooperation with Jiangsu Yadong Construction and Development Group, with the purpose of making the real estate business bigger and stronger. At the signing ceremony, Gao Wei, chairman of Colliers Holdings, said that as the pillar industry of Colliers Holdings, Colliers Real Estate uses fast turnover to increase the scale of the company and continues to achieve steady and quality growth as the basis for long-term cooperation between the two parties.

At the 2018 annual meeting and 2019 working meeting of Colliers Holdings, as the spokesperson for the strategic planning implementation plan of the real estate sector, Zhu Wuchao, executive president of Colliers Holdings and president of the real estate group, pointed out that the real estate sector must seize Market opportunities, moderately increase real estate project reserves; adhere to the model of quick project start-up, quick development, quick turnover, and a moderate scale of individual projects.

So what is Colliers Real Estate trying to do to increase the scale of the company and become a bigger and stronger company? Or is it a small but beautiful enterprise with quality?

Lu Wenxi believes that real estate companies cannot grow big without scale, and small real estate companies will eventually be gradually eliminated. However, under the impact of the "three red lines" of new financing regulations, the days of real estate companies competing for scale and speed have passed.

Statistics from Eju Kerui pointed out that after the impact of the epidemic, real estate companies ushered in a replenishment peak in the second quarter of this year. But by the third quarter, as financial supervision continued to tighten, the amount of investment by real estate companies dropped significantly.

Data show that the investment amount of the top 50 real estate companies in the third quarter fell by 26% compared with the second quarter. Among them, after the introduction of the "three red lines" regulatory policy, the monthly investment amount fell off a cliff in September, 42% lower than the monthly average in the second quarter, and only higher than January, February, and March this year.

The belated "C position" of the group

At the beginning of 2018, Colliers Holdings formulated a five-year development plan for 2018-2022. The plan clarified that among many sectors, the real estate group will serve as the Leading industries and core profit growth points in the next five years.

In fact, in the past few decades, the real estate business has not been prominent, or it has not occupied an important position within Colliers Holdings.

In its base camp of Nanjing, the only residential project developed by Colliers Real Estate is the Dingxiangyuan Community in Gulou, which was built in 2003.

According to its official website, Colliers Real Estate currently has 13 real estate projects under construction or equity participation across the country. The development areas include health care towns, cultural tourism towns, urban complexes, themed businesses, and mid-to-high-end Residential and other types of businesses.

In addition to its rich business formats, its city span is also very special, with projects in Wenzhou, Liuyang, Zhenjiang, Changchun, Changzhou, Yangzhou, Melbourne, Australia, Shenyang, and Beidaihe.

Colliers Holdings is positioned as a comprehensive urban industrial operator. The company's business covers five major fields: real estate, energy, commerce, education, and capital.

Although Colliers Holdings has experience in developing residential businesses, after 2000, its business focus was on the construction of automobile expos and home furnishing shopping malls. In 2004, Nanjing Colliers International Furniture Port was completed and opened, becoming the largest furniture store in Jiangsu Province. Afterwards, automobile expo malls and home furnishing shopping malls became the basic industries of Colliers Holdings.

It was not until 2017 that the real estate industry of Colliers Group transformed into mid-to-high-end residential development and construction of characteristic towns.

In 2018, under the new five-year plan, Colliers Holdings has obviously increased its high hopes for the development of its real estate business.

Colliers Holdings has formulated a five-year development plan for 2018-2022, focusing on strengthening and expanding real estate, energy, commerce, investment and other sectors. The real estate group will serve as the holding group’s leading industry and core benefit in the next five years. The growth point will be mainly the development of high-end urban residences, commercial complexes and vacation and health products, against the backdrop of higher requirements for products and services.

In order to successfully transform the real estate group into a high-quality community service provider, the board of directors of Colliers Group decided to merge the entire property sector with the real estate group.

Under normal circumstances, under the dual pressure of real estate regulation and deleveraging, real estate companies spin off their property sector businesses and list them separately, which can not only solve the problem of financing crunch, but also provide business expansion opportunities. So what are the risks and opportunities for Colliers to merge the entire property sector with the real estate group?

In the opinion of Tang Xiaochen, research director of CRIC Property Management Division, it may be that the real estate industry originally had two teams. The projects of property management and real estate are different, but currently it is possible that one of the real estate or property management projects is developing. Relatively weak, mergers are carried out in order to consolidate and strengthen service capabilities, or to focus the business more and reduce losses.

Tang Xiaochen said that the merger of the entire property sector and the real estate group is generally done by small businesses. If a certain business does not do well, it will be merged into other sectors. Large companies generally develop independently, and the opportunities It means that real estate can supplement its service capabilities, improve service levels, gain more reputation and brand, and achieve expected integration; risks include team integration, deviations in execution, etc.

Zhu Wuchao pointed out that according to the group’s five-year strategic development plan, Colliers Real Estate must become bigger and stronger. Project development urgently needs the support of high-quality property services. The integration of real estate groups and properties will have a great impact on the future development of Colliers Holdings. Very important.

When announcing the five-year strategic plan, Zhu Wuchao said that by 2022, the planning goal is for Colliers Holdings’ total assets to reach 40 billion yuan, revenue of 50 billion yuan, and profit of 3 billion yuan; the cumulative revenue in the five years will exceed 100 billion yuan, with profits exceeding 10 billion yuan, and owning at least one listed company.

Under the new five-year plan, Colliers Holdings obviously has high hopes for the real estate group. As competition among real estate companies becomes increasingly fierce, the market becomes more rational. A large number of senior executives of Colliers Real Estate have resigned. The choice left to Colliers Group is: scale or profit in real estate business? Quality or speed?

The "Business School" reporter will continue to pay attention to this.