After a slightly complicated adjustment, an asset management map born out of Zhujiang and Hopson gradually became clear.
Viewpoint Network In late April this year, there was news that the Hopson Pearl River platform would merge.
At that time, the information showed that Hopson’s Beijing headquarters platform was merged with Guangzhou headquarters except for the layoffs, and Hopson’s North China region was directly merged with Zhujiang Beijing Company.
At the same time, Hopson Chuangzhan headquarters platform has newly established an independent asset management company, and the main core team members are mainly old employees of Hopson and Pearl River Systems.
Recently, public information pointed out that the Pearl River Investment Management team has undergone adjustments.
It is said that Zhujiang Investment’s original large-scale production sector includes four centers of cost, marketing, design and development, and engineering, which will be merged with the corresponding departments of Hopson and packaged to form an asset management company. The asset management company belongs to Hopson Chuangzhan.
According to media reports, in the “Notice on the Division of Work and Appointment and Removal of the Group’s Management Team Members”, the former group president Wang Xi, vice president Wu Di, assistant president Huang Jie, assistant president and human resources and administrative management center General Manager Qian Yiwei no longer held positions in the group, “Tiao Brothers Group appointed another.”
In addition, Zhujiang Investment re-established the co-president, and Zheng Chenguang, the secretary of the board of directors and the general manager of Zhongtai, added the position of vice chairman, and Du Peng, a new face, added the position of vice chairman of the board of directors. First time on board.
After the adjustment, the latest board members consist of five members, namely Chairman Zhu Weihang, Vice Chairman Du Peng, Board Secretary Zheng Chenguang, and directors Zhang Junzhou and Zhu Ziyang.
After a slightly complicated adjustment, an asset management map born out of Zhujiang and Hopson gradually became clear.
behind the scenes
Since 1993, Zhujiang Investment has started from urban renewal and expanded its business sectors to energy and infrastructure, commerce, industry, housing, education, medical care, culture, technology, finance, etc.
By the end of 2022, Zhujiang Investment Group’s total assets will exceed 360 billion yuan, and it will develop more than 160 projects, including 113 residential projects, 23 urban complexes, and 25 star-rated hotels. Among the land reserves invested by Zhujiang, 90% are located in the first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen.
Starting from the city, the slightly long development cycle and capital investment have caused problems such as slow return of funds. Open source and cost reduction are problems that enterprises must solve. However, in the continuously sluggish market environment, relying on itself to alleviate business flow will undoubtedly encounter resistance.
Viewpoint New Media previously reported that, as a related party of Zhujiang Investment, Zhujiang Life Insurance has always had capital exchanges. In addition to related party loans or prepayments, Zhujiang Life Insurance also indirectly invests in Zhujiang Investment through partnerships.
However, in March 2021, Zhujiang Life was also punished by the China Banking and Insurance Regulatory Commission due to the project subsidiary’s financing borrowing exceeding the regulatory ratio, the use of insurance funds in violation of regulations to pay project bidding deposits, and the long-term occupation of insurance funds by related parties. The channel for blood transfusion began to be partially blocked.
On the other hand, as early as 2021, when Zhu Jurong, chairman of the board of directors of Hopson Development, offered an olive branch to Luo Zhenyu, he intended to separate the real estate investment business from the commercial sector. This series of operations obviously requires experts in the field to advance concretely.
With Luo Zhenyu’s official entry into the job, news that Hopson will re-establish an asset management platform emerges endlessly.
In more than two months after joining the company, Luo Zhenyu quickly formed a fund and asset management team of more than 30 people, and compared this team to a “special force” – “Everyone has their own specialties, which add up to a very large team. A powerful lethal team.”
From the perspective of Hopson Commercial, the management segment covers commercial complexes, office buildings, industrial complexes, hotels & serviced apartments, and its business covers more than ten mainstream cities such as Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, etc., and has more than 100 commercial real estate projects. The area of completed and operational projects exceeds 5 million square meters.
Rapidly developing into the era of stocks, Hopson has accumulated a large number of rental properties. When the development profit decreases, old renovations and first-level development are subject to more and more restrictions, and corporate strategy and track are also limited.
Then, to move forward, we need to open up a new path to convert assets into capital. “Financialization” is an obvious track, and it is also the answer given by Hopson.
Next, how to unravel the cocoon step by step and straighten out the assets is a problem to be solved in front of the management team.
Luo Zhenyu once revealed that after coming to Hopson, the real estate development and commercial groups may be more clearly divided into two parts. In 2022, Guandian New Media communicated face-to-face with Luo Zhenyu and learned that after a year of deployment and sorting out, the commercial group has basically been transformed into a relatively independent group from the legal structure, and the next step is to push these assets to In front of the stage, they can be noticed by the market and more investors.
After the structure is established, the next step is to fund, which is more conducive to the operation in the capital market. This is the next stage to be done. “We need to accelerate the speed of fundization, and consider whether the entire organizational structure is optimized to the possibility of being a commercial group, and then we can achieve it one by one.”
Due to the dual considerations of Zhujiang Investment and Hopson, it is the best solution to practice internal skills and embark on the road of capitalization.
Accompanied by this personnel adjustment, it may also mean that the integration work is coming to an end at a certain level. In addition to new identities and new faces in the management team, what will be on the stage soon will also be a new “Hesheng” system . How to withdraw capital and go forward to acquire more projects may all need to be considered in the new strategic deployment.
Asset Management Puzzle
If Luo Zhenyu’s task in joining Hopson is to establish a real estate asset management system and capitalize Hopson’s existing assets, then the consumption infrastructure REITs announced at the beginning of the year will help Hopson speed up the progress of the asset management puzzle.
On March 24 this year, the China Securities Regulatory Commission announced the “Notice on Further Promoting the Regular Issuance of Real Estate Investment Trust Funds (REITs) in the Infrastructure Field”; (REITs) Project Application and Recommendation Work Notice”.
For the first time, the national regulatory authority stated in a formal written document: “Research supports the issuance of infrastructure REITs for consumer infrastructure that enhances consumption capacity, improves consumption conditions, and innovates consumption scenarios.”
Industry insiders pointed out that the issuance of infrastructure REITs requires project operation to have stability, sustainable operation capabilities, and good growth potential. The above-mentioned relevant documents require that the distribution ratio of operating cash flow assets of property rights infrastructure projects be reduced from 4% to 3.8% %.
At the same time, the current REITs require that the historical operation of infrastructure should have the characteristics of “high overall occupancy rate, high rental income, good rent collection, good credit status of major lessees, stable lease contracts, and reasonable industry distribution of lessees”.
It is also mentioned in the notification document of the application recommendation that the sponsor (original stakeholder) should use the recovered funds to increase investment in convenience commerce, smart business circles, and digital transformation to better meet the consumption needs of residents.
However, it should be noted that consumer infrastructure REITs have clear requirements for asset categories, “priority support for urban and rural commercial network projects such as department stores, shopping centers, and farmers’ markets”, and infrastructure REITs for community commercial projects that guarantee basic people’s livelihood.
Under this premise, there is still a step to be completed before the official promotion: Take Guangzhou Haizhu TIT Hopson International Plaza as an example. It consists of an international Grade A office building, a 185-meter-high international five-star hotel and apartment, and two SOHO apartments.
Before pushing the “mall” into consumer infrastructure REITs, it is necessary to separate the asset from the whole project.
From the organizational structure to the legal structure, it should be sorted out and divided as clearly as possible, so that a more transparent Hopson will have a chance to win more favor.
According to the annual report of Hopson Chuangzhan, as of the end of 2022, there are 7 Hopson commercial city complexes in operation and preparations, including Hopson Plaza (city-level complex), Hopson Plaza (regional boutique shopping center), Hopson Xintiandi (various experiential commercial complexes) Center) three major product lines.
The project is located in the core business district of a first- and second-tier city, integrating various property forms such as shopping centers, office buildings, hotels, apartments, and residences. The projects in operation include Beijing Chaoyang Heshenghui, Shanghai Wujiaochang Shenghui, Chengdu Wenjiang Heshenghui, etc. Relevant data show that the occupancy rate of the Hopsonway product line has remained at 99% since its opening.
In addition, its Heshang technology platform is also continuing to develop new categories and new business models, such as incubating the MOHO series of high-end commercial complexes and building innovative landmark commercial complexes.
As of December 31, 2022, the land reserve of Hopson’s commercial sector was about 7.26 million square meters, and the land reserve of first-tier cities (Beijing, Shanghai, Guangzhou, Shenzhen and Linshen area) reached 6.9 million square meters, accounting for 95%.
In the next 3-5 years, Hopson Commercial will open 12-15 new urban complexes and shopping centers, including Tongzhou Hopson Plaza in Beijing, Suhewan Hopson Plaza and Jingan Hopson Plaza in Shanghai, etc.
“C-REITs, or real estate private equity investment funds are very good exit channels. After the recent news came out, the management team is also actively discussing research and advancement.” At the investor meeting earlier this year, Hopson’s management mentioned: ” On the whole, these are capital circulation channels for commercial real estate, and there will be relevant considerations from the perspective of Hopson. It is possible to put several major shopping malls, Hopson Plaza, and Hopson Plaza into REITs.”
After this integration, Zhujiang Investment’s assets may also be incorporated into the new asset management platform, which may lead to the revitalization of “Hesheng” assets to capital.