Analysis Of Wanda Commercial Real Estate "De Real Estate" Mode

Wanda, the largest commercial real estate developer in China and even the world, will go to real estate.

Wanda Group Chairman Wang Jianlin recently announced that Wanda started the fourth round of pformation.

The main content is that commercial real estate will remove real estate and realize completely light assets.

"Wanda Plaza will not have heavy assets in the future.

Wanda Commercial real estate Limited by Share Ltd will remove the "real estate" two words, become Wanda Commercial Investment Company or business investment management company to realize the comprehensive pformation of Wanda Commercial real estate.

As the main product of Wanda Commercial Empire, Wanda Plaza has been supporting the construction of office buildings, shops, and residential buildings. It has invested in Wanda Plaza by selling cash flow from these products.

According to statistics, as of the end of 2015, Wanda Commercial real estate as a "heavy asset" mode of operation of the project is 135 Wanda Plaza.

However, in Wang Jianlin's eyes, this model is about to become the past tense.

"We have set a goal to digest 70 million square meters of sales property in 5 years, which means that within 5 years, Wanda Commercial real estate will achieve the goal of real estate development."

Wanda Commercial real estate, which has a total assets of nearly 500 billion yuan, now has more than 70% of its revenue from real estate sales.

Wang Jianlin wants to reduce reliance on this part of his income and turn to a greater degree of renting driven mode.

Wang Jianlin said, China's real estate industry has reached the turning point of supply and demand balance, and the era of high profit for lying in money has gone.

Although the heavy asset model can still develop, the difficulty is increasing.

To expand the scale rapidly, we must pform assets.

People in the industry have joked, "the so-called light assets, in other words, is playing other people's money."

Wanda's light asset model is such a feature that all the funds invested in building Wanda Plaza are owned by others and assets are owned by investors.

Wanda is responsible for site selection, design and construction.

And management, using Wanda Plaza brand and Wanda's globally created business information management "Hui Yun" system.

This mode has no real estate sales and is quasi financial investment behavior. Wanda and investors are divided into net rental income from 35:65 ratio.

The goal of Wanda is to increase the net profit of rent annually.

In fact, Wanda began to try to "take other people's money and do their own things" from 2014 onwards.

In January 2015, Wanda Commercial Real Estate announced its investment framework agreement with Everbright, Harvest Fund, Sichuan trust and fast money company. 4 institutions will invest about RMB 24 billion yuan to build 26 Wanda Plaza in the next two years, and Wanda business is only responsible for construction and management.

Wanda's move is to ironing the economic cycle through its own pformation.

In light asset mode, the money invested in Wanda Plaza comes from institutional investors or raised through financial products. Because there is no real estate sales, no matter the housing price change or market cycle fluctuation has little impact on this development mode, it avoids the impact of the economic cycle.

In this way, an account is made: suppose a standard light asset store can rent 100 million yuan a year, and the two shop will rent 200 million yuan a year, and Wanda can rent 70 million yuan.

One standard

The average rent is 100 million yuan. After deducting management costs, taxes and financial profits, the income is basically the same.

"From the financial statements, the return on light assets projects is very good, and the total profit of the two light asset shops is equivalent to a heavy asset store."

Wang Jianlin revealed that at present, Wanda is still negotiating with many investment banks, insurance funds and funds at home and abroad.

"I want to make sure that 63 light assets Wanda Plaza investment contracts are signed in 2015.

That is to say, 23 contracts for light assets Wanda Plaza, which opened in 2016 and 40 opened in 2017, will be signed for RMB 30 billion yuan a year.

It is reported that Wanda Plaza has been built for 3 years or so since the site selection, design, land acquisition and opening up. The projects planned for 2015 will no longer be replaced by light assets.

But in 2016, Wanda plans to open 50 Wanda Plaza, more than 20 are light assets.

After 2017, Wanda will maintain at least 50 Wanda Plaza annually, of which more than 40 are light assets.

"Wanda now has about 90000000 square meters of land reserve, of which 70 million square meters of property sold.

In 5 years, the 70 million square metres of sale property should be digested.

Enterprises are becoming lighter. "

Wang Jianlin said.

Wang also gave the strategic goal of Wanda's light capital post production.

First, it opened 400-500 Wanda Plaza in 2020; two, 2/3 of Wanda's commercial real estate profits in 2020 came from rental income.

Wang Jianlin said that if a company's net profit from 2/3 of the real estate, the company can no longer be called Real Estate Company, so Wanda Commercial real estate Limited by Share Ltd will remove the "real estate" two characters.