Shenzhen Metro extends a helping hand to Vanke again

Author | Cao Anxun

Editor | Zhou Zhiyu

Vanke's major shareholder Shenzhen Metro once again made a move to support Vanke with real money and silver.

On May 27th, at the last moment before the end of the listing of the Vanke Shenzhen Bay Super General Land, Vanke welcomed the "white knight". The announcement from the Shenzhen Public Resources Trading Center showed that Shenzhen Metro and Shenzhen Nanshan District State-owned Assets Bai Shuo Yinghai jointly won this land with a bid of 2.235 billion.

The land has a land use period of 30 years, with a remaining period of 23 years and 7 months, mainly for commercial office and hotel use, with a self-occupancy requirement of 70%.

Vanke stated that Shenzhen Metro's participation in winning the land use rights for the project reflects the major shareholder's support for Vanke with real money and silver in a market-oriented and legal manner. The completion of the transaction will help reduce the occupation of funds by non-core assets, focus on doing well and strengthening the three major core businesses.

Industry insiders analyze that although there have been significant positive developments in current real estate policies, it is expected to take time for the market sales to reflect the recovery. For real estate companies like Vanke, safeguarding cash flow security remains a top priority at this stage.

"Especially for non-core assets such as commercial and office land, with a high self-occupancy ratio and large fund occupation, it takes a long time to operate and cultivate after completion to see results. In the current market situation, it is obviously wiser for Vanke to quickly divest non-core assets to recoup funds, which can also help it cope with market changes and strategic adjustments," the above-mentioned person said.

In recent months, Shenzhen Metro has provided intensive support to Vanke, with Shenzhen Metro Chairman Xin Jie stating that they will continue to support Vanke's healthy development as always and will not be shaken by market fluctuations. They have also taken out real money and silver with Shenzhen state-owned assets, either subscribing to Zhongjin Yinli REIT, buying stakes in Vanke's subsidiaries, or taking over the Super General Land.

At several important development junctures for Vanke, the shadow of Shenzhen Metro can be seen.

Zhu Xu, the secretary of Vanke's board of directors, revealed at a performance meeting that Shenzhen state-owned assets have taken four major measures to help Vanke dispose of real estate, long-term equity investments, project cooperation, and actively coordinate financial resources in a market-oriented manner to help and support Vanke. If all these measures are implemented, it is estimated that they can help Vanke release over 10 billion yuan in liquidity.

In this way, with the joint efforts of major shareholders, financial institutions, and Vanke's "streamlining and strengthening" actions, Vanke has safely landed.

On May 23rd, Vanke obtained a 20 billion yuan syndicated loan led by China Merchants Bank. With previous bank loans and CMBS, within ten days, Vanke's total financing amount has reached 30 billion yuan, resolving the liquidity crisis, and giving the market a reassurance pill, controlling the credit risks that have been spreading and upgrading in the industry.

The epic "517" real estate new policy has greatly improved market expectations, and real estate stocks have also seen a wave of daily limit increases. The viewing volume in first and second-tier cities has significantly increased, allowing real estate companies like Vanke, who are still holding on, to see more light. Zhang Dawei, chief analyst of Centaline Property, said that the "517" new policy reflects the central government's firm determination to stabilize the real estate market, and the bottoming out and stabilization can already be anticipated.

With the new policy taking effect and the market stabilizing and recovering, Vanke is also expected to complete subtraction under the support of Shenzhen Metro and transition to a new development model soon. As the most representative and forward-looking real estate company in the industry, after safely landing, how to live well is a new proposition for Vanke, which will also inspire the transformation of other real estate companies