Author | Anjou Cao

Editor | Zhou Zhiyu

The real estate industry has been floating for 40 years. The leading housing companies have changed seats several times. The once famous giants such as Evergrande and Country Garden have fallen one after another, while a number of state-owned enterprises and state-owned giants have risen to prominence.

China Construction Yipin, a slightly unfamiliar name, is a rising star.

This subsidiary of China Construction, which came out of Wuhan, has quite a bit of ambition. It hopes to sell for the “top 20 in the country” this year; in the first 4 months, China Construction Yipin added a new land value of 26.29 billion yuan, ranking 5th in the industry.

China Construction Yipin, along with central and state-owned enterprises such as Greentown, C&D, Yuexiu, and Huafa, have become up-and-comers in the second half of real estate, and they will be more active for a long time to come; the former Fujian 100 billion dark horse, the “Flying Tigers” team, has long since turned into a cloud of smoke in the real estate cycle.

After more than three years of deep adjustments, the 10-trillion real estate market still has great potential. As a new cycle begins, new players and new giants will start the second half of the race.

gallop

Four days after the introduction of the epic new property market policy, Pujiang Star, developed by China Construction Yipin, opened. Taking advantage of this, it lost 90% on the opening day, with a strong revenue of 4.9 billion yuan.

There is always no shortage of buyers for quality assets in scarce locations.

It's not just this project; China Construction Yipin has sold well overall this year. In the first 5 months, China Construction Yipin achieved full-caliber sales of over 10 billion yuan, ranking among the top 30 in the industry. Three years ago, it was still a little transparent with over 100 names.

China Construction Yipin comes from the three branches of China Construction. Originally, it only focused on construction projects. It began to intervene in real estate development in 2021, using Hubei as its base, and its footprint gradually spread to places such as Chengdu, Chongqing, Beijing, Tianjin, Guangzhou, and Foshan.

China Construction Yipin's imagination is not just the top 30, but the sword points to the top 20 and top 10 to become the new real estate giant of the future.

In order to achieve this goal, China Construction Yipin has acquired land rapidly in the past two years.

According to Kerui data, following extensive storage expansion last year, China Construction Yipin added a land value of 26.29 billion yuan in the first four months, entering Shanghai, Beijing, and Shenzhen. It is the 5th largest landlord in the industry, leaving behind major developers such as Greentown, China Merchants Shekou, Longhu, and Poly Development.

A month ago (April 25), China Construction Yipin spent 3.75 billion yuan to acquire a remodeled plot of land along the Yangpu River at a cost of about 3.75 billion yuan. This kind of financial strength and the courage to acquire land is already out of reach for the vast majority of developers today.

As a real estate upstart, the rise of China Construction Yipin is inseparable from the support of a central enterprise background.

Bai Wenxi, vice chairman of the China Enterprise Capital Alliance, who once worked for China Construction, said that as subsidiaries of central construction enterprises, they used to mainly build on behalf of others, but now they have financing channels through central enterprise credit. At the same time, they have collaborative capabilities in planning, design, project construction, and cost control, so they have a natural advantage in transforming into a developer.

As the central government adjusted the assessment standards for central state-owned enterprises in recent years, requirements for profits and returns have been increased, and various subsidiaries under China Construction, the “largest contractor in China”, have competed to become developers.

According to China Construction's financial report, its first and second main revenue force, housing construction engineering and infrastructure construction, has continued to decline in recent years, and gross margin has declined; the real estate development business, which has a broad market and a significantly higher gross margin than the previous two, has become a driving force for China Construction to improve profits and boost contract sales.

The market also provides them with huge opportunities. Guojin Securities pointed out that, benefiting from the continuous implementation of favorable policies, the real estate industry is slowly recovering. The activity of the second-hand housing market has increased, and central state-owned enterprises focusing on improving products may take the lead in reflecting the improvement in market expectations.

More than just China Construction Yipin, other real estate development platforms from the China Construction Eighth Engineering Bureau, “China Construction Hachiko” such as China Construction Dongfu, China Construction Zhidi, and China Construction Jiuhe are going against the trend and have become regular customers in the top 100 sales and land acquisition lists.

In the first five months of this year, the cumulative full-caliber sales of China Construction Group's real estate business surpassed Poly Development and became the actual number one.

Changed

The rise of China Construction Yipin is due to cycles. Behind it, the giants and dark horses from the previous cycle have sadly left the market.

Looking back at 40 years of real estate in China, the housing enterprise pattern has been intensively reshuffled.

Beginning in the 90s of the last century, from the “Five Tigers of South China”, which started in Guangzhou, to the Big Four, Vanke, Country Garden, Evergrande, and Sunac, which later had central enterprise backgrounds, Poly, CNOOC, China Resources, and Greentown made the top ten sales lists one after another, and they all stood on the cusp and flourished for a while.

Following them are players from the Fujian Legion such as Sunshine City, Taihe, Rongxin, Baolong, and Zhongjun, the “King of the Southwest” Jinke, and the “Real Estate First Brother” Blu-ray Development in Sichuan. With deep cultivation of the region, they have rapidly risen to dominate one side.

It was an age of burning flames to cook oil. Along with the founders, their net worth also doubled. Xu Jiayin and Wang Jianlin were once among the richest people in the country. Many real estate bosses made the 100 richest list, bought quite a few luxury homes, private jets, and yachts, and often gave out red envelopes at annual meetings, which can be called the Real Estate Spring Festival Gala.

However, as the industry gradually changed from the golden age to the silver age and the black iron age, the fortunes of the giants and bosses rotated at an accelerated pace. It was not uncommon for the richest people to fall and “survive with a broken arm”, and only a few remained at the forefront of the industry.

Central enterprises and state-owned real estate agents have become the main players in the stable sequence. Last year, Poly Development replaced Country Garden as the new boss of the housing enterprise, and the sales rankings of the central government and state-owned developers all improved year by year.

Currently, real estate is on the eve of the beginning of a new cycle. Zhang Dawei, chief analyst at Central Plains Real Estate, said that due to the recent explosion of the strongest bailout policy in history, the central government's determination to stabilize the real estate market is very firm. The market can be expected to bottom out and stabilize.

More industrial capital and investment institutions have smelled signs of a steady recovery in real estate.

Not only did “Asia's Little Black Stone” Taimeng join forces with Middle Eastern tycoons and other investors to save Wang Jianlin and obtain a controlling interest; many “coal boss” families, such as Zhang Yaping and Wen Qiugui, also increased their holdings in high-quality real estate assets such as the Bulgari Hotel in Shanghai and COFCO Sea View One.

As the clean-up of the industry accelerates and the market stabilizes, the gameplay in the new era is also completely different. Only players who adapt to the new rules can successfully get through this cycle, or rise and survive in the new cycle.

From Country Garden to China Construction Yipin, new and old real estate giants are staggering and changing positions in sales lists and land acquisition lists. Since then, they are bound to have a long way to go, and each will have a different world.