After keeping an increase against the housing business market downturn in 2010, Gemdale also started playing a transformation game of “dancing like a colorful double-wing phoenix”.
At the 2010 performance presentation conference on March 18, Huang Juncan, CEO of Gemdale said that Gemdale would further maintain housing real estate as its main business and also expand to commercial real estate and real estate finance fields, forming a business framework of “One Core, Two Wings”.
In fact, it is not fresh to see what Gemdale imagines in such fields when taking Gemdale’s current state into consideration.
However, Ling Ke, Chairman of the board of Gemdale pointed out that in the next 5 years, commercial real estate and real estate finance would become two important wings supporting Gemdale’s take-off.
Actually, the transformation to take housing real estate as the priority and develop in housing, commercial real estate and other commercial types has become a current topic for many developers.
Performance promoted by high selling rate strategy
In 2010, two rounds of real estate regulation intensified the market fluctuation. In the face of policy regulation, Gemdale created a new-high performance promoted by high selling rate precision marketing.
The annual report of Gemdale in 2010 showed that in the previous year its sales amount reached RMB 28.3 billion Yuan, growing by 34% year on year. Meanwhile, Glendale’s annual net profit in 2010 achieved RMB 2.7 billion Yuan, increasing 52% compared with that of 2009.
Though Gemdale’s annual sales volume is not equal to that of Vanke, Poly, China Overseas, and other real estate companies, Gemdale’s total assets in the previous year reached RMB 72.8 billion Yuan, with a year-on-year increase of 31%, a return on equity (ROE) increase to 16.55%, and a gross margin of 38%, a little lower than China Overseas’s 42.6%.
In respect of land banking, Gemdale totally obtained 14 projects in 2010 and had 3.68 million square meters of newly added land. To the end of the report period, Gemdale’s land banking had reached 16.875 million square meters.
According to Gemdale, this could meet the requirements for development of the company in the next 3 to 5 years.
Focus on second-tier cities and commercial real estate
In the year of 2010, the“wind direction” of housing real estate changed tremendously resulted from the influence of the regulation policy, however Gemdale targeted on commercial real estate and real estate finance fields and made a rapid expansion. Gemdale’s annual report displayed that Gemdale had already set up the commercial real estate company in the last year. It is reported that Gemdale now has many commercial real estate projects located in Beijing, Xian, Shenzhen, etc.
The project development investment of Gemdale Group in 2011will reach RMB 18.9 billion Yuan, and most of the fund will be spent on 1-2 city complex projects invested by Gemdale in the commercial real estate field.
Wang Yong, General Manager of the commercial strategy management department of Gemdale, said at the performance presentation conference that Gemdale’s commercial real estate project development would focus on second-tier cities in the future, and its annual investment amount in the commercial real estate field would maintain about 20% of the total investment amount of the Group, which was expected to be up to RMB 60 billion Yuan in the next five years.
According to the annual report of Gemdale, in the year of 2010, Gemdale not only obtained newly high quality land resources in the cities like Beijing, Shanghai, Shenzhen, Wuhan, and Shenyang, but also successfully set foot into second-tier core metropolises including Dalian, Yantai, Changsha, and Changzhou.
Ling Ke said, “By the year of 2015, the scale of Gemdale’s commercial real estate is basically one time larger than that of Gemdale today.”
Real estate finance
Gemdale not only built the commercial real estate as its important business sector, but also made a difference in term of real estate fund business in the real estate finance field, said Huang Juncan.
In 2010, the second period of raising of the real estate USD fund cooperated by WINS Investment Fund subordinated to Gemdale and UBS was completed. It is reported that WINS Investment is Gemdale’s subsidiary private fund, specializing in China’s real estate project investment, and having multiple operation platforms in Beijing, Shenzhen, Shanghai and Tianjin.
Huang Juncan said that by the year of 2015, Gemdale would make WINS Investment become a professional real estate fund ranked top 10 nationwide, and continue to raise and manage USD fund and RMB fund.
He also said that WINS Investment would “be possible to set foot in affordable housing field”, however at present, it had no specific practicable project in this field.
The spin-off listing of WINS Investment has to be determined based on its business operation, and it is possible, Huang Juncan told a reporter in response to a question about the internal status of WINS Investment in the Group. “Wenow don’t have an IPO plan”, added Xu Jiajun, Secretary of the Board.
