On April 18, “2017 China Real Estate Finance Forum”sponsored by Financial Specialized Committee of Chinese Real Estate Industry, Specialized Committee of Chinese Commerce and Tourist Real Estate and Specialized Committee of Chinese Urban Development was convened in Guoyi Hotel Beijing. Nearly 100 enterprises and institutions from domestic real estate industry and relevant industries gathered together to discuss the Chinese development of real estate finance in 2017.
Wins Investment President Xu Yafeng attended the forum upon invitation, and participated in the summit dialogue of “The Upgrading and Transformation Strategy and Investment and Financing Opportunity of Real Estate in the New Situation”.
At the forum, President Xu Yafeng first introduced Wins Investment to all guests present.
As a wholly-funded subsidiary of Gemdale Corp., Wins Investment specializes in real estate investment and financing, domestic asset securitization and overseas real estate investment. In terms of business orientation, the company will consider the development status quo of the whole industry on the one hand, and will make some of its own exploration on the other hand.
First, in terms of the status quo of total sales volume of Chinese real estate industry in 2016, a new historical high was made in both sales area and sales amount.
In addition, the top ten real estate enterprises seized a share of 20% of the entire market, and there were 12 real estate enterprises above the scale of RMB 100 billion. This is a very obvious scale effect and a trend marked by “the strong will become stronger”. Second, at the beginning of 2017, we noticed, since the regulation of real estate, the funds in the entire market has become tighter and tighter, financing had become more and more difficult, and the market interest rate has been increasing.
This year, Wins shows some innovative business orientations.First, President Xu said that he hoped to share with the market the trading capacity, financing capacity and brand influence of Gemdale and even its capacity and influence in the capital market. Wins is willing to cooperate with various peers and small and medium-sized developers in the form of resource sharing, with the fund of Wins serving as the link of capital. Next, President Xu said, the No.4 Document of Fund exerts a very strict limitation over 16 key cities; however, an internal change has been occurring to these 16 key cities; in Tier-1 cities and even Tier-1.5 cities (Nanjing, Hangzhou, etc.), the trade volume of secondhand houses has far surpassed that of firsthand houses. In the opinion of President Xu, these key cities will have more new investment opportunities, including the renovation of cities and the renovation of stock properties, which can be again launched onto the capital market for asset securitization after the said renovation. This is a huge prospect and opportunity that Wins can see in key cities, and this field will also be a key orientation for the future investment of Wins.
In the process of real estate upgrading and transformation, how to promote the development of real estate with new financial instruments like CMBS and quasi-REITS is very important.
With regard to this field, President Xu values asset securitization very much. When Wins launched the first fund in cooperation with UBS in 2008, UBS had already issued publicly-offered REITS in cooperation with Mitsubishi. At that time, China did not have any product of asset securitization. Therefore, Wins issued privately-offered fund. It was not easy to do so at that time, so the offering scale was only about USD 200 million. Today, the scale of the fund under the joint management of UBS and Mitsubishi is more than USD 10 billion.That is to say, in the future, the investment in fund-holding properties or properties with a stable rental income will be a common practice on the international market.
Last year, Chinese personal housing loan grew very rapidly, so that a lot of people on the market became panic-stricken: the housing price would rise again if they failed to make purchase. In the opinion of President Xu, this phenomenon occurred because there was no channel for these customers to invest in products with a stable return of rental; the industry was groping forward continuously; either quasi-REITS or para-REITS, really hoping that real REITS could be released. As far as Wins is concerned, its advantage lies in investing in equity and running development fund. Wins boasts rich experience in this regard, and is familiar with land prices, development, ultimate withdrawal path and other links.However, as for individual investors, it is very important to be really able to buy a product with a stable return of rental in the capital market. They can not only enjoy the return of rental, but also share the value brought by future asset appreciation, which is very important.
About Wins
Wins Investment is a private equity fund management firm who engages in domestic and overseas real estate market investment. It has set branches in Beijing, Shanghai and Shenzhen. Taking the pioneer spirit, Wins Investment started exploring the field of real estate finance since 2006. In 2008, together with UBS, it set up UG Fund, a US dollar fund, which is the first domestic standardized real estate fund in China. In 2010, it expanded into RMB fund business. And now, it has become the leader of China’s real estate funds.
By December 31, 2016, the scale of RMB funds under the management of Wins Investment reached up to RMB 12.4 billion. The total management scale of Wins Investment reached RMB 28.5 billion in RMB assets and 0.24 billion US dollars in US dollar assets, which are equal to RMB 30.1 billion in whole.
As the investing shareholder of Wins, Gemdale Corporation (600383.SH), shareholder of Wins Investment, was founded in 1988. It is one of the earliest listed real estate enterprises in China and has achieved national layout. Its businesses include residential development, sales and decoration, commercial properties development, sales, possessing and operation, real estate finance, property service and community management, international education featuring tennis and sports industry operation. Residential and commercial projects developed and possessed by Gemdale Corporation now have covered 39 cities in both China and the United Stated. In 2016, Gemdale Corporation’s sales amount of real estate reached about RMB 100.6 billion, with the sales area of about 6.58 million m2. As at the end of 2016, the land reserve was about 29.50 million square meters, the total assets were about RMB 153.6 billion, and the net assets were about RMB 37.4 billion.
