[New Express Daily] As City Landmarks Builder, Yuexiu Property Reinforces its Foundation in Guangzhou and Moves Nationwide
Release Date:2014-03-28 15:43:16

“In 2014, Yuexiu Property will on one hand keep its modest scale expansion and increase its strength; on the other hand, it will pay more attention to enhancing the ability of innovation and management of business model, to make its own development path in the fierce market competition.”-- President of Yuexiu Holding Limited Zhang Zhaoxing

Yuexiu Property is exactly the real estate company which has been involved in the construction of important city landmarks in Guangzhou since the beginning of reform and opening up and has witnessed the fast changes all the way.

According to incomplete statistics, 4% households in Guangzhou live in the real estate developed by Yuexiu Property. In the new period, Yuexiu Property, a veteran in the eyes of Guangzhou people, is entering the period of high speed development, with full bloom in residence, commerce and finance. Last year, the sales amount in Guangzhou accounted for 60 percent of the Group's total sales amount. The Planning Director of Marketing Center of Yuexiu Property-Wu Yuefeng said that this year the sales in Guangzhou accounts for about 40%. After consolidating the foundation in Guangzhou market, Yuexiu Property is making a solid pace to expand nationwide.

Serve as the vanguard of new district construction

With administrative adjustment of Zengcheng and Conghua as well as the merge of Huangpu District with Luogang District, many developers prepare to flex its muscles at the new districts. Yuexiu Property has come up with "spot goods", introducing 3000 flats to the market in the new Huangpu District at one time. In Conghua, Yuexiu Property was also one of the first developers to enter the district. "Our famous estate-Yat Chuen Villa in Conghua is one of the earliest large-scale estates in Conghua, and the subsequent projects of Yi Quan Yun Chui and Yi Quan Ying Chui are sought after by Guangzhou and local buyers. After administrative adjustment of Conghua and operation of Metro Line 14 in the future, Conghua with good landscape resources will be the first choice for Guangzhou buyers. "Wu Yuefeng said.

In fact, from the beginning of 1980s, when Guangzhou opened prelude of old town transformation, Yuexiu Property has responded positively to the call of municipal government, and developed South Village. In 1985, taking the opportunity of the "Sixth National Games", Guangzhou municipal government began to implement the strategy of moving the downtown eastward, and Yuexiu Property once again became a pioneer in developing Tianhe District. Yuexiu Property accomplished Tianhe Sports Center and supporting facilities of the surrounding four main roads within two years, and transferred to the government for management and use free of charge. Since the construction of the tallest building in Guangzhou--Zhujiang New Town West Tower started in 2005 , Yuexiu Urban Property has owned 400,000 square meters of Grade A commercial property in Tianhe Central Business District, accounting for one third of the total area in the district.

Sales goal this year is raised by 50%

Last Friday, Yuexiu Property held a performance press conference , which showed that the Group achieved an operating income of about RMB 14,209 billion yuan in 2013, with a year-on-year increase of 75.0%. Profit attributable to equity holders was approximately RMB 2.88 billion yuan, with a year-on-year increase of 16.1%. Basic earnings per share was about RMB 0.3094, with an increase of 15.8%. Excluding the revaluation of investment property and the related tax influence and negative goodwill, the core net profit was about RMB 1,54 billion, with a year-on-year increase of 28.8%.

In 2013, the Group had a total contract sales amount of about RMB 14.634 billion, with cumulative contract sales area of about 1,155,200 square meters, increasing by 19.0% and 11.6% respectively, at the average price of RMB 12,700 /square meter, with a year-on-year increase of 6.7%. Since the sales was better than expected, the Group's management raised the annual sales goal from the original RMB 13.2 billion to RMB 14.5 billion last year, which was successfully accomplished. In 2014, the Group's contract sales goal was set at RMB 22 billion, rising by 50% against the total contract amount of sales in 2013.

Meanwhile, in 2013, Yuexiu Property followed the strategy guide of "return to first and second-tier cities", and purchased seven pieces of prime land in Guangzhou, Hangzhou and Foshan, with the total amount of about RMB 20.124 billion and a total construction area of about 2.75 million square meters. Among them, four pieces of land were acquired through cooperation with investment funds, so the Group only had to pay about RMB 5.817 billion for the land, achieving scale effects while maintaining a low debt ratio. As of the end of 2013, the Group's total land banking has reached about 15.26 million square meters. In the aspect of scale expansion, the Group will continue to implement the development way of "regional root", expand development in existing cities or regions, gather superior resources, to focus on the development in the first and second-tier cities which have high population density, wide industry market and great potential of real estate market, and increase land banking in the principle of "living within our means."

Zhang Zhaoxing, President of Yuexiu Holding Limited said: After nationwide and scale expansion in recent years, Yuexiu Property has developed into a national real estate company with projects in 12 cities throughout the country and contract sales amount of over 20 billion yuan this year, from a local real estate enterprise in Guangzhou, with annual contract sales amount of only RMB 4, 0 billion. In 2014, Yuexiu Property set the theme of work as "reform and innovation for strength, transformation and upgrading for leap-forward", that is, to continue to make unremitting efforts, to maintain an appropriate scale expansion and increase the strength on the one hand and to pay more attention to enhancing the innovation and management ability of business model, to make its own development path in the fierce market competition on the other hand.

Accelerate business mode innovation

It is reported that Yuexiu Holding Limited will continue to actively build up a business mode of real estate finance and joint development. In the front part of land purchase, consolidate and optimize the co-mode with investment funds to improve resource allocation efficiency; in the backend of commerce project operation, deepen the interaction with dual platforms of Yuexiu REIT, to further implement the development strategy of "real estate development +commercial operation + capital operation".

In addition to real estate development, Yuexiu Holding Limited has achieved fruitful results on management and operation of commercial projects in recent years. Yuexiu REIT is one of Yuexiu’s four platforms listed in Hong Kong and also the world's first real estate trust funds listed in Hong Kong and investing in the Mainland market, with an assets scale of RMB 22.7 billion. It ranks 19 among 200 listed funds in Asia.

It is reported that Yuexiu REIT owns six high-quality properties of Guangzhou IFC, White Horse Building, Victoria Square, Fortune Plaza, Urban Building and New Metropolis Building, with a total area of 681,000 square meters and property valuation of RMB 22.7 billion. During 2008-2013, the compound growth rate of operating income of the Funds was 20.2%, with an average occupancy rate of over 98%. In 2013 the Funds had a business income of RMB 13.7 billion, with a year-on-year increase of 92.5%, a distribution of HK $ 0.2731 per unit, a year-on-year increase of 3.3%.

Deputy Executive President of Yuexiu REIT Liang Danqing said that compared with REIT funds listed in Hong Kong, Yuexiu REIT's biggest feature is its diversified property, with format covering Grade A office space, clothing professional market, high-end luxury hotel, service apartments and retail stores, with strong ability against risks. Currently, Yuexiu REIT's six projects are from the original Yuexiu Property, and all are located in Guangzhou. According to the revised Trust Deed of Yuexiu REIT, the investment area may extend from Guangdong to the whole country.