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Five major banks to grab the beach rentals

Time: 2018-01-10         Source: China Economic Net         Author: China Economic Net

On the occasion of the arrival of 2018, a number of state-owned banks have successively “snapped” the housing rental market.

On December 18, 2017, Bank of Communications announced that the bank's Guangdong branch had signed a housing leasing strategic cooperation agreement with a number of housing companies and housing leasing platforms, including Vanke, Poly and Foshan Jianxin Housing Leasing Co., Ltd. The contracted parties totaled more than 150 billion yuan of intentional credit line.

Since the construction bank entered the housing leasing market in early November 2017, the five major state-owned banks such as ICBC, China Construction Bank, Agricultural Bank, Bank of China, and Bank of Communications have all announced their entry into this market, and have provided many financial products to developers. Individual tenant.

According to the incomplete statistics of Time Weekly reporters, as of now, CCB, ICBC, Agricultural Bank, Bank of China and Bank of Communications have signed strategic cooperation agreements for housing leasing market development with about 30 provinces and cities, and the total amount of intentional credit support provided. More than one trillion yuan.

However, the ideal is full and the reality is very skinny. A shareholding bank in South China told the Times Weekly that the rate of return on domestic rents is generally not high. Compared with direct loans to developers, long-term rentals have a longer cycle and cost more.

"At present, the state-owned banks are still in the stage of exploring the housing leasing market. There is no mature model for a series of problems such as profit model, operation and operation mode, and exit. This is also the main reason why we have no action in this period." Said.

State-owned big line preemptive layout

Into the housing rental market, the fastest and most active is the Construction Bank.

On November 2, 2017, CCB Guangdong Branch and Guangdong Provincial Housing and Construction Department and Foshan Municipal Government reached a strategic relationship for housing leasing. CCB will aim to provide a platform for government supervision and provide guarantees for customer transactions, from the next five years from technology, Strong support was given to funds and channels.

On the same day, the Bank of China announced that the Xiamen Branch of the bank cooperated with the Xiamen Municipal Bureau of Land Resources and Housing. The two sides will cooperate in the field of land supply related to the housing leasing market, pilot rental housing construction, and housing leasing financial innovation.

One day later, China Construction Bank Shenzhen Branch and 11 real estate companies such as China Merchants, China Resources, Vanke and Evergrande, and 11 enterprises and institutions such as BYD (quotation 002594, diagnostic stock) signed a strategic contract for housing leasing and launched more than 5,000 sets of long-term projects. Rent a house and release a personal housing rental loan product.

On December 18, 2017, CCB Beijing Branch jointly launched more than 1,500 sets of “CCB Jianrong Homes” with Beijing Safe Housing Center, First Open Group, Financial Street (Market 000402, Diagnostics) and other institutions. The bank has successively signed housing leasing cooperation agreements with governments and real estate enterprises in Chongqing, Shiyan, Zhongshan, Handan, Changsha and Liaoning.

ICBC also selected the first destination to enter the housing rental market in Guangdong. On November 16, 2017, the Industrial and Commercial Bank of China Guangdong Branch Business Department and the Guangzhou Municipal Housing and Urban-Rural Construction Committee signed the "Strategic Cooperation Agreement", which will provide 500 billion yuan of credit support for the participants in the Guangzhou housing rental market; The Industrial and Commercial Bank of China Beijing Branch also announced that in the next five years, it will provide a total of not less than 600 billion yuan in financing support for the participating entities in the Beijing housing rental market.

Then, the Bank of Communications also entered the housing rental market. On December 18, 2017, the Bank of Guangdong Branch signed a housing lease strategic cooperation agreement with a number of housing enterprises and housing rental platforms, and awarded more than 1,500 contracted entities including Vanke, Poly and Foshan Jianxin Housing Leasing Co., Ltd. The intentional credit line of 100 million yuan is specially used for the financial support housing rental business development.

Prior to this, Bank of Communications has used Guangdong as a pilot to provide 20-year financing support for Foshan Jianxin Housing Leasing Co., Ltd., to achieve the first housing leasing support financing in Guangdong, and to provide a solution for solving the housing leasing financing bottleneck. .

In addition to state-owned big banks, joint-stock banks have also frequently appeared in the housing leasing market. CITIC Bank (Market 601998, Diagnostics) announced at the end of October last year that it will provide Country Garden Group with a 30 billion yuan security fund in the long-term residential sector in the next three years, while providing integrated financial services.

Coincidentally, Hu Yuefei, president of Ping An Bank, said at the Ping An Bank’s real estate finance annual meeting that Ping An Group is actively developing and constructing a housing leasing financial service system, hoping to join hands with major housing companies. The housing system to promote the supply of the main body, multi-channel security, and rent and sale was established at an early date.

The state-owned large marching army rental housing market is full of power. According to some studies, the size of China's housing leasing market is about 1.1 trillion yuan. The size of the housing transaction market is about 15 trillion yuan. The rental market is only 7% of the trading market, and the average market in the US, Japan and other mature markets exceeds 40%. The ratio is quite large.

Yiju Research Institute believes that the next 10 years will be the stage of rapid development of the leasing market. It is expected that the urban and rural areas will have an effective leasing demand of 5.4 billion square meters in 2027; the rent will reach 3.86 trillion yuan, an increase of 138% over 2017.

At present, China's financial industry is still dominated by bank financing. As bank capital enters the rental housing market, more entities will be effectively involved in the rental housing market.

Return rate problem to be solved

In terms of specific models, in addition to signing agreements with the government and granting credit to housing companies, state-owned banks also support the tenants with more financial products.

The main body of the Industrial and Commercial Bank of China's Beijing-based behavioral rental housing construction has launched a “rental housing development loan” with a financing amount of up to 80% of the total project investment and a maturity of 25 years; a personal rental housing loan for individual tenants, with a financing amount of up to 100 Ten thousand yuan, the term can reach 10 years.

In mid-December 2017, the Construction Bank launched a “storage loan” for the landlord (lessor), which means that the house can also “save the bank”. CCB Guangdong Branch divided the “storage loan” into a trilogy: the landlord sold its own housing lease right to CCB, and CCB paid the entire rent in one lump sum. For example, a five-year rent of 500,000 yuan was delivered to the landlord at one time; then, CCB Bring the property to a professional rental agency for rent.

At the China Housing Leasing Summit held on December 20, 2017, Liu Jun, President of China Construction Bank Guangdong Branch, revealed that CCB Guangdong Branch currently has three major categories of companies, investment banks and individuals, and 40 financial products for purchase. One-stop, all-category and guaranteed leasing financial service system, such as rent rebuilding, decoration and maintenance, asset revitalization, and rental consumption.

Time Weekly reporter learned from the Bank of Communications Guangdong Branch that in the field of housing leasing, Bank of Communications has launched financial services ranging from financing support, platform construction, personal housing leasing, and consulting services to “full chain coverage, full product support, and integrated platform support”.

Zhang Dawei, chief analyst of Zhongyuan Real Estate, said that the bank's current leased credit products are likely to have the possibility of misappropriation of credit funds and the possibility of renting and renting houses in the second home. Banks need to increase the review of lenders.

In addition, the rental return rate is also a problem. In a recent speech, the chief economist of the China Banking Association, Ba Shusong, mentioned his research data: the current rental returns rate in major cities is not high, basically below 3%. For example, Shanghai is 1.33%, Shenzhen. It is 1.34%.

Not long ago, at the 2017 China Housing Leasing Industry Innovation and Development Summit Forum, Yang Jun, deputy general manager of the Bank of China Investment Bank and Asset Management Department, talked about the difficulties in securitization of China's housing lease assets. Yang Jun said: "The housing leasing industry has a long operating cycle, low rental return rate, uncertain profit model, lack of mature financial calculation model, and low market acceptance of rental cash flow forecast during securitization. Most require external credit enhancement. , increase financing costs; securable assets are difficult to find, long-term high-quality large-scale rental resources supply is relatively short."

Yan Yuejin, research director of the think tank research center of Yiju Research Institute, told the Times Weekly reporter that although the profit level of the rental housing market is not high for the time being, the state-owned banks are actively involved in it, and there is a certain corresponding policy orientation. The reform is first, and the follow-up will be bigger. Participants follow up.

Asset securitization

In the trillion-dollar housing rental market, how to solve the problems of long capital investment, low rental return rate, and large capital demand? Asset securitization or a solution to the above problem.

In this regard, Zhang Bo, chief analyst of the Housing and Housing Research Institute, pointed out that the current rental rate of long-term rental apartments in China is only 3%, and many projects do not even return to the level of financing costs. In the future, we can increase housing financial support, enrich the tax incentives and dividends system of real estate trust investment funds (REITs), and expand the variety of product types.

In 2017, more than one apartment-type asset securitization products were launched in the Chinese market. In particular, in the short period of two months at the end of the year, six long-term rental apartment financing plans were intensive, involving nearly 40 billion yuan.

On October 11, 2017, the first long-rent apartment asset-type REITs in China officially “breaking the ice”, which opened the door to financing long-term rental apartments.

On October 23, 2017, the first domestic single-enterprise rental housing REITs products were approved, and Poly Real Estate (quotation 600048, diagnostic stocks) was issued with a quota of 5 billion yuan; on December 1, the country's first single-storey long-term rental apartment Mortgage securitization products were approved, and China Merchants Shekou (quotation 001979, diagnostic stock) was issued with a quota of 6 billion yuan.

On December 11, 2017, the first long-term rental apartment in the inter-bank market, ABN, was launched. China Merchants Shekou and China Construction Bank jointly launched the “Flying-Jianrong Investment Long-term Apartment Series Asset Support Bill (ABN); 20 December The first self-owned long-rent apartment storage rack-type equity-type REITs in China were approved by the exchange, involving an amount of 3 billion yuan.

“In 2016, the entire real estate industry has accounted for 74% of the new financing scale.” Yang Jun said that for the capital-intensive enterprises such as real estate, this traditional financing method has certain limitations. Asset securitization is financed on the basis of a stable and predictable steady cash flow of the underlying assets.

"In the financing method to solve the problem of the subject's credit, more importantly, it has accelerated the turnover of funds, and has a very positive effect on revitalizing the stock, improving liquidity and even improving the financial situation," said Yang Jun.

Gan Kaishan, director of the Shanghai Valuation Department of Savills Davis, pointed out that in 2016, domestic asset-based securitization products issued on the basis of real estate accounted for about 6% of all securitized products. By 2017, this proportion has rapidly increased to 12 %-13%. Due to the small number of domestic investment channels, such new types of financial products are very popular among investors in the market.

Li Peijia, a senior researcher at the Bank of China International Finance Research Center, said that the current rental housing securitization market in China is still in the early stage of exploration. Although there are still many problems, such as low return on assets and lack of supporting financial instruments, with further exploration, it will provide experience for various aspects including policies and support.

“For financial innovation, it is expected that there will be various policy support in the issuance of debts and securitization by leasing companies in 2018. Similar financing is also a better way to withdraw funds, which helps to reduce costs and is also an innovation in institutional type leasing products. An important manifestation of this." Yan Yuejin analyzed the Times Weekly reporter. In view of the fact that several single-category real estate trust investment funds have been launched in 2017, it is expected that the relevant support policies will be introduced in 2018, basically in line with the establishment of the first pilot. practice.

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