Accelerate the return of funds! Real estate M&A volume surged over 70% month-on-month to 52.8 billion in one month

Recently, the pace of mergers and acquisitions in the real estate industry has accelerated.

On January 4, Greenland Holdings announced that it planned to transfer 52 shares of Greenland Liquor Management for 624 million yuan.

On January 3, Huafa Co., Ltd. announced that its wholly-owned subsidiary Zhuhai Huafa planned to acquire 51 shares of Shenzhen Ronghua Real Estate held by Shenzhen Sunac Cultural Tourism.

On the same day, Cinda Real Estate announced that its wholly-owned subsidiary Cinda Star City and the company’s related party China Cinda *** jointly participated in the subscription of shares in Wuhu Qinchang.

According to statistics from CRIC Research Center, in December 2022, the key monitoring real estate companies *** involved 48 mergers and acquisitions transactions, 32 of which disclosed the transaction amount, and the total transaction consideration was approximately 52.8 billion yuan, a significant month-on-month increase. An increase of 72.4.

Industry insiders said that the enthusiasm for mergers and acquisitions picked up significantly at the end of the year, and real estate companies accelerated the speed of asset disposal and capital withdrawal. It is expected that policies in 2023 will focus on guiding real estate risks to a "soft landing". In the later period, the central government may introduce more policies in the areas of real estate company financing, mergers and acquisitions, and debt extensions to help real estate companies resolve liquidity crises.

Many real estate companies plan to dispose of assets to withdraw funds

At the beginning of the new year, there are constant news about real estate companies disposing of assets and making mergers and acquisitions.

On January 4, Greenland Holdings announced that the company plans to carry out strategic cooperation with Mingyu Hotels and Resorts in the hotel management business. According to the intention of strategic cooperation, the company's holding subsidiary Greenland Digital Technology Co., Ltd. plans to transfer its 52% stake in Shanghai Greenland Hotel Management Co., Ltd. to Minyou Hotel. The equity transfer consideration is 624 million yuan.

On January 3, Huafa Co., Ltd. announced that Zhuhai Huafa, a wholly-owned subsidiary of the company, planned to acquire 51 shares of Shenzhen Ronghua Real Estate held by Shenzhen Sunac Cultural Tourism. The total transaction amount is approximately 3.58 billion yuan, of which the target equity purchase price is 3.57 billion yuan and the target debt purchase price is 11.9 million yuan. The acquisition was made in cash. After the acquisition is completed, Zhuhai Huafa will hold 100% equity interest in Ronghua Real Estate.

On the same day, Cinda Real Estate announced that Cinda Star City, a wholly-owned subsidiary of Cinda Chongqing Real Estate, a wholly-owned subsidiary of the company, and China Cinda ***, a related party of the company, participated in the subscription of partnership shares. The total subscription scale of the partnership is 1.06 billion yuan, of which China Cinda, as a limited partner, subscribed 278 million yuan, accounting for 2.622% of the partnership's scale; Cinda Star City subscribed 211 million yuan, accounting for 19.91% of the partnership's scale, and Project management and development.

It is worth noting that China Cinda is one of the four major domestic financial asset management companies (AMC). Recently, AMC has made some progress in bailing out real estate companies. Two of the leading real estate companies Sunac China Projects have been bailed out by two AMCs. Among them, China Huarong teamed up with 6 banks and CITIC Trust to reach equity financing cooperation with Sunac Shanghai Dongjiadu project. China Orient also reached equity financing cooperation with Sunac Wuhan Taohuayuan project. Sunac Obtain capital injection from AMC by transferring project equity.

The amount of mergers and acquisitions by real estate companies in December last year was approximately 52.8 billion

According to statistics from CRIC Research Center, in December 2022, the key monitoring real estate companies *** involved 48 mergers and acquisitions. There were 32 transaction amounts disclosed, with a total transaction consideration of approximately 52.8 billion yuan, a significant increase of 72.4% month-on-month. The average size of a single M&A transaction disclosed was 1.65 billion yuan (750 million yuan in November). The enthusiasm for M&A at the end of the year picked up significantly, and real estate Enterprises speed up asset disposal and capital withdrawal.

From the perspective of transaction progress, 5 transactions passed the board of directors' plan in December 2022, of which 2 transactions with disclosed transaction amounts involved a price of 18.3 billion yuan; 16 transactions involving 16.1 billion yuan signed transfer agreements Among them, China South City sold 69.35% of Xi'an China South City's equity to the major shareholder SEZ Development for a price of 5 billion yuan, and SIIC sold 90% of the equity and debt in the North Bund land parcel to AIA Life for 4.6 billion yuan; among the 18 completed transactions, the transaction amount was disclosed. 7 transactions, corresponding to a transaction size of 6.9 billion yuan. In addition, the number of ongoing, listed and terminated transactions were 3, 5 and 1 respectively.

Among them, there are two mergers and acquisitions that have attracted much market attention:

One is China Fortune Land Development’s announcement on December 28, 2022 that it plans to sell its southern headquarters assets for 12.4 billion yuan to China Resources Land is involved in the Wuhan Yangtze River Center, Wuhan Zhongbei Road project and Nanjing University Campus project, as well as a Shenzhen property company.

The CRIC Research Center pointed out that on December 8 and 26, 2022, China Fortune Land Development successively sold Langfang Industrial Park and Gu'an related assets, and it is expected that a total of 1.692 billion yuan will be withdrawn. The funds recovered through the sale of assets exceeded 15 billion yuan, but there is a gap with the "about 75 billion yuan in funds recovered from the sale of assets" mentioned in the "Debt Restructuring Plan" disclosed in September. Asset disposal may be accelerated in the future.

Another major merger and acquisition was China Merchants Shekou’s announcement on December 17, 2022 that it planned to acquire 24% of Nanyou Group’s equity and 2.89% of China Merchants Qianhai Industrial’s equity through stock placement. Since China Merchants Qianhai Industrial directly holds the former Qianhai Free Trade Investment owns approximately 806,200 square meters of land in Mawan, Qianhai, Shenzhen. After the transaction is completed, China Merchants Shekou will significantly increase the value of land resources in Mawan, Qianhai, Shenzhen.

From the perspective of the types of properties subject to transactions, residential M&A increased significantly in December 2022. 19 transactions involved equity in development projects, and the scale of M&A of residential projects disclosed to be transferred was approximately 27.5 billion yuan, mainly driven by China Land Development 124 The impact of major transactions such as the RMB 500 million disposal of the assets of the Southern Headquarters and the RMB 5.9 billion divestment of Lushang Development’s real estate business to Shandong Chengfa. In addition, there were 26 transactions involving diversified investments, with a corresponding transaction volume of 22.3 billion yuan, accounting for 42% of the total scale. Among them, Sino-Ocean planned to sell 50 shares of Chengdu Sino-Ocean Taikoo Li to Swire Properties for 5.55 billion yuan. Recently, Sino-Ocean has frequently disposed of assets, with only 12 There are 3 property sales planned every month.

The CRIC Research Center pointed out that the recently held Central Economic Conference reflects the central government's urgency to prevent and deal with real estate risks. It is expected that policies in 2023 will focus on guiding real estate risks to a "soft landing", on the one hand, to stabilize housing. For corporate credit entities, in addition to promoting the existing "three arrows" real estate financing support policies, the central government may later introduce more policies in the areas of real estate corporate financing, mergers and acquisitions, and debt extensions to help real estate companies resolve liquidity crises; secondly It is to ensure delivery, emphasizing the responsibilities of all parties, solving the problem of off-plan house delivery, and stabilizing residents' confidence in buying houses.