This Dougezhuang plot, which was eventually pocketed by Greentown, attracted 12 real estate companies and consortia to compete together.
Viewpoint Real Estate Network Jinmao and Greentown, the “old friends”, have taken another step on their way to work together.
According to an announcement issued by China Jinmao on September 10, it plans to acquire a 30% stake in Beijing Chaoyi Real Estate Development Co., Ltd., a subsidiary of Greentown China, and cooperate in the development of a land in Beijing.
Viewpoint Real Estate New Media learned that Beijing Chaoyi Real Estate Development Co., Ltd. is a wholly-owned subsidiary of Beijing Ningcheng Real Estate Co., Ltd., an indirect wholly-owned subsidiary of Greentown China.
China Jinmao North Enterprise Management (Tianjin) Co., Ltd., an indirect wholly-owned subsidiary of China Jinmao, signed a cooperation agreement with Ningcheng Real Estate to acquire 30% of Beijing Chaoyi Company’s equity from it, and pay registration to Beijing Chaoyi Company in proportion to the equity held The capital is 1.08 billion yuan, and the total amount of shareholder loans does not exceed 2.16 billion yuan.
After the completion of this transaction, Ningcheng Real Estate and Jinmao North will hold 70% and 30% of Beijing Chaoyi Company.
Dougezhuang plot being contested
The target plot that Jinmao participated in the development this time is plot 1306-638 of Sunjiapo Village, Dougezhuang Township, Chaoyang District, Beijing.
In May this year, in Beijing’s first centralized land supply, Ningcheng Real Estate, a subsidiary of Greentown, won the bid for 6.82 billion yuan after bidding for a high-standard residential construction program.
In May of this year, Beijing’s first centralized land supply was also inferior to a war without gunsmoke. This Dougezhuang plot, which was eventually pocketed by Greentown, attracted 12 real estate companies and consortia to compete together.
After several rounds of quotations on the day of the auction, the Longfor+ZhuZhu+Ping An Consortium reached the upper limit with 6.82 billion yuan and entered the high-standard residential construction investment report stage. It was finally taken by Greentown in one fell swoop. The transaction price was about 40,000 yuan per square meter. Meters, the premium rate is 15%.
Public information shows that the plot is located in Sunjiapo Village, Dougezhuang Township, Chaoyang District, Beijing. The starting price is 5.93 billion yuan. It covers an area of approximately 85,059 square meters. The total planned construction area is approximately 242,400 square meters. Land for construction. The plot is close to the South-East Fifth Ring Road, and is only 500 meters away from the Huangchang Station of Line 7, and the plot does not need to bid for the proportion of government property rights or the area of public rental housing. The sales guide price is 65,000 yuan per square meter.
Judging from the surrounding conditions of the plot, it includes living facilities such as Beijing Chaoyang District Experimental Primary School Boyuan Branch, Beijing 171 Middle School Chaoyang Dougezhuang Branch, Beijing Quansheng Hospital, Chaoyue Baihui Shopping Center and other living facilities. In terms of housing prices, surrounding new houses such as Shimao Beijing Tianyu are all priced at more than 100,000 yuan, and the average price of second-hand houses R&F Festival Walk is also more than 50,000 yuan.
The acquisition of the Dougezhuang plot undoubtedly added a dazzling touch to Greentown’s report card in Beijing this year. It is understood that Greentown added 67 new projects in 31 cities in the first half of this year, with an estimated value of 214 billion yuan. Among them, Beijing’s newly expanded 20.8 billion yuan, accounting for 10%.
For Greentown, which will double its revenue and profits in the next three years, it is inevitable to actively acquire land for investment and expansion. However, it will inevitably face the pressure of financing and debt.
The data shows that Greentown’s net debt ratio and debt-to-asset ratio excluding advance receipts have both increased from the end of last year. Among them, the net debt ratio has increased by 11 percentage points.
Therefore, Geng Zhongqiang, Executive Director and CEO of Greentown, said at this year’s interim results meeting: “During the development of the company, we have been looking for an optimal balance between speed and net debt ratio.”
The entry of Jinmao may coincide with Greentown’s development aspirations to some extent.
Long-standing cooperation
Jin Mao’s investment in the Greentown Dougezhuang plot is not the first cooperation between the two. In 2020, Greentown has invested in many projects including Beijing Jinmao Mansion Phase II and Yihe Jinmao Mansion.
In October last year, the equity of Beijing Qingmao Real Estate Co., Ltd., the project company of Yihe Jinmao Mansion, was changed. The new shareholder, Beijing Weicheng Real Estate Co., Ltd., held 60% of the shares, and the registered capital increased from 10 million yuan to 25 million yuan. The new shareholder is a wholly-owned subsidiary of Greentown. In November, Greentown increased its capital by 4.9 million yuan to Beijing Hemao Real Estate Co., Ltd., the second-phase project company of Beijing Jinmao Mansion, with a 25% shareholding ratio.
For Jinmao at that time and Greentown at this time, the choice of co-development projects with cooperative enterprises may be for the purpose of reducing financial pressure.
For Jin Mao, choosing to join hands with old friends again may have more considerations.
Jin Mao said that this transaction will further expand the group’s cooperative investment and project layout in Beijing, which will help maintain the group’s market influence in Beijing.
Viewpoint real estate new media observations have found that since 2019, Jinmao has changed its development thinking, avoiding high premium land acquisition, and expanding its reserves through urban operation projects.
In the first half of the year, China Jinmao acquired a 29.9% stake in China Hongtai for HK$1.481 billion, becoming its second largest shareholder.
According to data, China Hongtai was established in 1995 and is mainly engaged in the development of large-scale industrial town projects. As of June 30, China Hongtai has 8 industrial operation projects under its umbrella.
In addition to expanding land reserves through the channels of urban operations, the second is to increase opportunities for obtaining high-quality land in the form of cooperation. The joint development of the Dougezhuang plot with Greentown is just in line with its internal logic.
