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INVESTMENT: Vanke. Its Time As A Developer Has Gone
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Vanke
Its Time As A Developer Has Gone

By Morgan Brady

BT 201811 Investment 01万科
作为开发商的时代已经过去

在“财富”杂志2018年发布的“财富”500强公司名单中,500家公司中有120家是中国公司。 名单上的房地产开发公司仅来自中国。 其中最大的公司之一是万科。 该公司成立于1984年,总部位于中国深圳,如今,它在全国各地的经济圈和位于中国中西部的枢纽中占有一席之地。

由于对住房,房地产空间和快速城市化的需求不断增加,全球房地产市场预计到2025年将达到4263亿美元的营业额,这部分是由于移民的增加。此外,中国,印度和非洲许多国家的经济发展增加了可支配收入,刺激了对房地产的需求。

万科受益于这些趋势,因为它的产品主要是迎合中产阶级。它最近改变了其运营模式并转变为更精简的模式,不仅开发房地产,还代表第三方管理它们。该公司的业绩令人印象深刻,其股票正在公开交易。该公司的市值目前为270.2亿港元。该股票在最近5年内有所增长,但随着增长而改善。随着房地产市场的增长,这一份额可以成为多元化投资组合的良好补充。

BT 201811 Investment 02In the Fortune 500 list of companies published by Fortune in 2018, 120 companies out of the 500 were Chinese. The real estate development companies on the list came only from China. And one of the biggest of those firms is Vanke. The company was founded in 1984 with its headquarters in Shenzhen, China, and today it has a strong presence around the vibrant economic circles around the country and hubs located in the Midwest of China.
 

Vanke has been rising in the ranks in the Fortune 500 list (although its rank fell back in 2018), as it is among the growing number of Chinese companies on the famous list. Currently, it is a group with many subsidiaries such as Greentown Real Estate Group, Greentown Asset Group, Greentown Town Group and Greentown Management Group.
 

Vanke’s Background

The company began by offering good houses, good services, and good community. And today it has developed its offer to “urban and rural development and living services provider”. Today, it employs over 77 thousand people and has assets to the tune of US$178,968 million and profits in excess of US$ 4000 million.
 

Over the last 30 years, the company has built over 1800 projects in more than 60 cities in China. Additionally, it has carried out many real estate development projects for commercial and residential purposes in Malaysia, the United States, Hong Kong, and the UK. The group offers a wide array of real estate options through its subsidiary, including tall buildings, detached houses, and other types of homes.

BT 201811 Investment 03Vanke’s Projects in China

Vanke prides itself by offering affordable properties for ordinary people. One square meter in Beijing Xanshan Yanlu area costs around USD 10,000, and one square meter in the Hainan Greentown Blue Bay costs around USD 4,000, for example.
 

Last year, the company carried out an impressive socially beneficial project to transform apartments built with poor living conditions into model rooms in Shenzhen. Those residential apartments under the name “urban village” constituted more than 70% of the properties available for lease in the southern city. These apartments were improved in terms of sanitation, management, and fire protection. Purpose is to rent those refurbished apartments afterward, and Vanke established a subsidiary company to manage leasing activities for these.
 

This project is important for both the community and Vanke, since it signifies Vanke’s transformation from a property developer into a city supporting service provider, which includes property management, education, and catering. The move has been prompted by the company’s desire to expand its operations and presence in the markets, as well as the curb on speculation by the Chinese government, which led to a mild decline in home prices in major cities. The company’s chairman, Yu Liang, showed conviction behind the move and stated that “our time as a developer has gone”.
 

Similar projects are likely to be carried out in other cities as well, as the company expands its service offerings. Transformation seems to be on its way as 52% of the company’s 2280 projects of properties under management are not owned by the company.

BT 201811 Investment 04Vanke’s Projects in the United States

Vanke’s projects in the United States are also proving to be a success. It recently teamed up with other real estate American companies: Adam American Real Estate, and Slate property Group. Together, the three companies bought a site in Brooklyn for $47.75. The project involves building a 150 unit, 16,700 square meter residential tower on the Nevins Street. The project is Vanke’s second project in Brooklyn.
 

Vanke’s entrance into the US market was in 2013 with the Lumina project in San Francisco, valued at $620 million and in partnership with Tishman Speyer. In 2014, it invested in a tower designed by Norman Foster on Lexington Avenue in Manhattan in cooperation with other developers such as Hines from Houston and PFR from New York.
 

Expanding In a Growing Market

Vanke’s strategy of global expansion is healthy. The global real estate market is expected to reach $4263 billion in turnover by the year 2025, driven by the increasing demand for housing, real estate space and rapid urbanization, which is caused in part by the increase in migration. Additionally, economic development in countries like China, India, and many countries in Africa has increased disposable income and is stimulating demand for real estate.
 

Vanke is positioned to benefit from these trends, given that its offerings cater mostly to the middle class. It has recently changed its operating model and moved into a leaner model where it not only develops real estate properties but also manages them on behalf of third parties. The company’s performance has been impressive, and its shares are being traded publicly. The company’s market capitalization is currently 270.2 HKD billion. The stock had grown in the latest 5 years, but it has corrected following that growth. With the growth in property market, this share can be a good addition to a diversified portfolio.

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