The land reserve situation is undoubtedly linked to future sales, and Greentown is well aware of this. Therefore, Greentown’s reserve expansion this year has also entered a positive rhythm.
Viewpoint On the evening of October 7, Greentown China released operating data for the nine months ended September 30, 2022.
According to the disclosure, in September 2022, Greentown Group’s self-invested projects sold 4,186 units, with a sales area of about 570,000 square meters. The monthly sales amount was about RMB 15.7 billion, and the average sales price was about RMB 27,450 per square meter.
In the first nine months of 2022, the contracted sales area of Greentown Group was approximately 5.34 million square meters, and the contracted sales amount was approximately RMB 142.3 billion; of which the equity attributable to Greentown Group was approximately RMB 78.2 billion. As of September 30, 2022, the accumulated amount of signed subscription agreements but not transferred to sales contracts was approximately RMB6 billion, of which the equity attributable to Greentown Group was approximately RMB3.5 billion.
It is worth noting that the sales of Greentown Group’s agency construction projects also account for a large proportion.
In September 2022, Greentown Group obtained a contracted sales area of approximately 750,000 square meters for the agency construction management project sold under the Greentown brand, with a contracted sales amount of approximately RMB 11.4 billion. From January to September 2022, the contracted sales area of Greentown Group’s commissioned construction projects totaled approximately 4 million square meters, and the contracted sales amount was approximately RMB 54.5 billion, accounting for 27.69% of its total contracted sales amount.
Therefore, for the nine months ended September 30, 2022, Greentown Group has accumulated a total contracted sales area of approximately 9.34 million square meters and a total contracted sales amount of approximately RMB 196.8 billion, a year-on-year decrease of 24.91%.
According to Greentown’s previous disclosure, its comprehensive sales target for this year is set at a minimum of 310 billion yuan and a challenge of 330 billion yuan.
Two-thirds of 2022 has passed, and the sales of 198.6 billion yuan in the first September are reminiscent of the management’s statement at the semi-annual report performance meeting: “If there is further recovery on the existing basis, the recovery will be greatly improved. Better, the company still has confidence in the 330 billion yuan.”
In addition, in September 2022, Greentown Group added three new land reserves, with a total land area of about 210,000 square meters and a total construction area of about 510,000 square meters. Greentown Group is expected to bear the cost of about RMB 9 billion.
The land reserve situation is undoubtedly linked to future sales, and Greentown is well aware of this. Therefore, Greentown’s reserve expansion this year has also entered a positive rhythm.
According to statistics, in the first nine months of 2022, Greentown China acquired 2.13 million square meters of land, a year-on-year decrease of 67.3%.
Geng Zhongqiang, executive director and executive president, once said at the previous performance meeting that Greentown Land Acquisition requires the average net profit rate of the project to be no less than 8% and IR no less than 15%, which are two entry thresholds. Moreover, there are higher requirements for the certainty of fulfillment, and now the land acquisition is more focused on the core sectors of core cities.
He said that judging from the actual land plots acquired in the first half of this year, the quality is indeed higher, and the net profit is close to 10%. More importantly, the recent land acquisition may be more profitable than the previous land acquisition.
Regarding the choice of acquisition projects and active reserve expansion, Guo Jiafeng, executive director and CEO, also mentioned that compared with mergers and acquisitions, the company basically acquired land in the public market in the first half of the year, because the projects on the public market are better.
“We have talked about many acquisitions and acquisitions of Greentown, and the numbers are very large, and we will find such and other problems. The land we bought was sold at the beginning of last year, when the land price was relatively expensive at the end of the previous year, and some have already been developed, and the planning after development. There are still some differences in design and Greentown’s quality requirements, so it is difficult to express the characteristics of Greentown’s products.”
The management also stated that Hangzhou will become a key area in the future: “Hangzhou is currently the city with the best sales potential in the national property market. First of all, it has a demographic dividend and ranks first in population inflow among the Yangtze River Delta urban agglomerations; among the inflows, the quality of talents is outstanding. Second The city’s economy is stable, and Hangzhou’s GDP growth rate will reach 8.5% in 2021. Moreover, the demand side of the region has not shown a significant decline, and the opening rate has reached more than 92%.”
As a real estate enterprise deeply cultivating Hangzhou, this year, the third batch of land supply in Hangzhou, Greentown also actively attacked accordingly, winning a total of 3 plots, costing a total of 9.5 billion yuan.
