Since the beginning of the year, the voice of bankruptcy of real estate enterprises has been heard.
Recently, two more real estate enterprises in Jiangsu officially declared bankruptcy, with hundreds of millions of real estate listed for auction. These two real estate enterprises are Yangzhou Yongda Real Estate Co., Ltd. and Rugao Lvyuan Real Estate Co., Ltd. The former involves hundreds of millions of yuan.
According to the announcement of the people’s court online, by the beginning of June 2020, the number of Real Estate Enterprise Bankruptcies this year has reached 208, more than 177 in the first half of 2018, which is relatively equal to the same period in 2019. In 2020, on average, one real estate enterprise will be liquidated every day.
Data shows that the real estate industry’s debt maturity this year is about 1.46 trillion, of which July is the peak, reaching 1490 trillion. July is coming soon. Although some real estate enterprises are quite amazing in the amount of goods delivered and get cash to use for turnover, it is more difficult for most small and medium-sized real estate enterprises to go back to the good old days.
From January to may 2020, the average sales value of the top 50 real estate enterprises was 62.28 billion yuan, a year-on-year decrease of 4.86 billion yuan, or 7.2%, which is no surprise. After all, it will take time for the market to recover. On the whole, we should still be confident in the future. However, in the early stage of such recovery, the confidence of many real estate enterprises may collapse, unable to support the real recovery.
At present, the real estate enterprises declared bankruptcy are mainly small and medium-sized ones in the third and fourth tier, which have low strength and weak ability to resist risks. In the future, the number of bankruptcies of small and medium-sized real estate enterprises may continue to increase.
The total sales scale of top 10 real estate enterprises accounts for more than 30% of the national total, the total sales scale of top 100 real estate enterprises accounts for more than 60%, and the market share of the top 15% real estate enterprises accounts for more than 85%. The market share of the vast majority of small and medium-sized real estate enterprises can be ignored.
Due to the increasing concentration of the industry, the head real estate enterprises will occupy more market share, further squeezing the living space of small real estate enterprises. With the increasing market competition pressure of small and medium-sized real estate enterprises, the fault tolerance rate will become lower, and some small real estate enterprises with insufficient strength will eventually be merged or go to the edge of bankruptcy.
On the other hand, the national policy continues to adhere to the principle of “real estate is not speculation” in the macro sense, to stop the flood of real estate industry, and to tighten the real estate financing. Under the multiple pressures of limited land acquisition, sales pressure and financing obstruction, it is easy to lead to the disconnection of the capital chain of real estate enterprises, which makes small and medium-sized enterprises face debt default, and more serious or will lead to bankruptcy and reorganization.
At present, the total number of real estate enterprises in China is as high as 97000, almost every city has hundreds of small and medium-sized real estate enterprises, the vast majority of which are shell companies, and there are not a few who set up a real estate company for a real estate project.
Huang Qifan, vice president of the China International Economic Exchange Center, has publicly said that the number of Chinese real estate development enterprises will decrease by more than two-thirds in the next decade. In the next decade, based on the high-quality transformation requirements of the real estate industry and the trend of reducing the total amount of development, the real estate development enterprises will inevitably have a process of substantial reduction and contraction.
Now, affected by the new crown black swan, the real estate industry is speeding up the process of industry shuffling at a faster speed.
Compared with the bankruptcy of small and medium-sized real estate enterprises, some large-scale real estate enterprises also frequently fall into the dilemma of capital chain. Some enterprises have to sell their assets or hand over their controlling rights to survive.
Since last year, Yinyi group, once one of the top 500 private enterprises in China, and sanyeng Hongye, once one of the top 100 real estate enterprises, are all on the verge of bankruptcy. The leading real estate enterprises, such as Fusheng group and Taihe real estate, are in debt.
On May 13, Taihe Group announced that the controlling shareholders of the company are planning to introduce strategic investors into the company, and related transactions may lead to changes in the control of the company. In this regard, according to media reports, Huang Qisen, founder of Taihe Group, intends to transfer the position of the largest shareholder to replace Taihe Group. Taihe Group is communicating with a number of investors. The receiving company is probably a central enterprise, and specific matters are still under discussion.
From Sansheng, Yinyi, Fusheng to Taihe, these enterprises once occupied a place in the industry, but now they also began to have business problems. The main reason is that under the background of the industry scale reaching the ceiling and the market share shrinking, the competition among the major real estate enterprises is further intensified, among which the fault tolerance rate of small and medium-sized real estate enterprises is also lower.
Facing the shuffle of the industry, it is easier for the real estate enterprises that can get financing and money to survive.
However, compared with large-scale real estate enterprises, it is difficult for small and medium-sized real estate enterprises to get loans and finance, and most of them are not listed, and the financing channels are relatively single. The “inherent disadvantage” of capital will increase the difficulty of land resource acquisition, marketing and other aspects, and hinder the development of enterprises.
Since 2019, the financing environment of the industry has been tightened and the overall financing cost has increased, so the financing disadvantage of small enterprises has been further enlarged. Even during the outbreak, the central bank released water many times, but the final inflow of real estate funds is limited, and the rescue received by small enterprises appears to be a drop in the bucket.
At the same time, it is worth noting that in addition to breaking the property and Housing enterprises, some medium-sized real estate enterprises are also starting to default and thunder. In the future, more and more real estate enterprises will have such debt crisis.
On March 6, the documents disclosed by Shanghai clearing house showed that as of the end of the payment date, the company failed to raise sufficient cash funds as agreed, failed to pay the principal and interest in full as scheduled, and constituted a material breach of contract.
On April 23, Yida China Holding Co., Ltd