From November 20 to 21, 2018, “2018 BRICS Forum and Award Ceremony of the Seventh BRICS Value List”, guided by China Real Estate Association and hosted by Jinzhuan Media and Gold Master, was held in The St Regis Shanghai Jingan. The theme of this forum was “Defining the Future”, which brought together leading economists, experts, entrepreneurs and institutions from the global property, finance and business sectors, several first-line listed real estate giants, hundreds of financial institutions and nearly thousands of global investors to analyze the market from various perspectives and around the themes of global real estate finance and global asset allocation and embrace 2019.
Mr. Xu Yafeng, president of WINS Investment, was invited to attend this summit and participated in a round table forum entitled “Digging Gold Stocks: Real Estate Asset Management Practices and Trends” on the first day of the conference to discuss the development strategies and opportunities of real estate asset management in the stock age with industry leaders.
“Two-wheel driving”Investment Strategy
First of all, Manager Xu introduced that, as the property finance sector in “One Body and Two Wings” of Gemdale Corporation, WINS can build a sustainable financial brand in the real estate finance field with the core competitiveness and brand influence of Gemdale Corporation. For the investment strategy of the stock assets, Xu put forward the concept of “two-wheel driving”. Firstly, in the early stage of the project, a certain amount of funds can be invested in the project through private equity fund, and then the project can be developed, transformed and operated; secondly, after the assets form a relatively stable cash flow, they can withdraw from the capital market through asset securitization. WINS will continue to strengthen financial innovation, open up the traditional real estate private equity fund and asset securitization product model, and form the platform complementary cooperation effect of property financial capital operation, which will provide more diversified products for investors with different investment needs, ensure efficient capital operation at all stages of assets, and take all advantages of two-wheel driving to create values for investor.
Fund is the accelerator of urban renewal
In the face of trillions of existing markets, how to make investment arrangements? Manager Xu said that, for the investment in urban renewal, the location of fund must first be clearly defined. It is rather an accelerator than the entire dominator of asset. The stock market is rich and complex in format, including office, business, industrial park, apartment, pension, culture and tourism, etc. No investment enterprise can completely cover all fields, so the stock market in the future will be an open ecology, and the fund can seek to cooperate with enterprises in more professional fields and play the role of accelerator. For example, the Shanghai No. 8 Bridge project, in which WINS participated, after the acquisition of assets, WINS Investment, as the transaction consultant and general coordinator of asset-backed securities, conducted a comprehensive analysis and calculation of the cash flow and solvency of the project with the cooperation of the operation and management team, determined the pool assets of the project, and also repeatedly discussed the transaction structure, product structure and issue scale and explored innovative solutions, forming a sustainable development model for the asset through asset securitization products.
An opportunity to revalue the stock market
According to the data, China’s real estate development business has obviously shown a lack of growth, while the real estate market has a large number of stock assets. Manager Xu judged that, in the next two to three years, the stock assets in the stock market will have the opportunity to be revalued. “In the past, the valuation of real estate was basically based on the selling price, and there was little opportunity to pay attention to such issues as long-term cash flow and exit earnings that need to be considered in reconstruction, operation and continuous value enhancement. However, for the stock assets, institutional investors will be more in charge in the future.” Manager Xu said that for the institutional investor market, the most important was the investing stage in the four stages of raising, investing, managing and withdrawing, which basically decided every following link, such as asset pricing and withdrawing, and so on, requiring a forecast or judgment in the investment stage. In the future, the value of the stock asset will be priced by the capital market to reverse the current return value of the asset, thus pricing the asset. In addition, Manager Xu suggested that we should look at it from a rational and scientific point of view in the process of asset revaluation.
Deep ploughing the first-tier and second-tier stock markets
As for the opportunities for deep cultivation of real estate funds in the next three to five years, Manager Xu pointed out that, first of all, with the upgrading of industry, the future layout of urban renewal will focus on first-tier cities and core second-tier cities. As far as the urban renewal of property forms is concerned, it is hoped to cover a wider range, such as office, regional commercial center, long-term rental apartments and other property types with potential for value enhancement, and even non-performing assets. Secondly, with the improvement of consumption quality, people’s demand for health and happiness will lead to the demand for experiential consumption, for tourism, and for apartments, etc. In the future, the real estate fund will put forward higher requirements for real estate asset management.
