Recently, the Ministry of Housing and Urban-Rural Development announced the "Regulations on Housing Leasing (Draft for Comments)", which mentioned supporting the development of real estate investment trust funds and supporting housing rental companies in issuing corporate credit bonds and asset-backed securities specifically for the development of housing rental business.

According to report data, as of 2017, the rent scale of the national housing rental market reached 1.3 trillion yuan, and the annual new rent scale was approximately 100 billion yuan.

Judging from the layout of real estate companies, as of 2019, about 25% of the top 100 real estate companies are directly or indirectly involved in long-term rental apartments, and more than 60% of the top 30 real estate companies are involved in long-term rental apartments.

Judging from the disclosures of various real estate companies, the layout of long-term rental apartments by real estate companies is mostly an attempt to diversify their business.

Taking Vanke A as an example, the company's 2020 interim report disclosed in detail its diversified business layout, of which long-term rental apartments are part.

As of the reporting period, the company has opened a total of 127,300 motel apartments in 33 cities, with 18,900 newly opened in the first half of the year.

The overall occupancy rate of projects that have been opened is 88%, and the occupancy rate of mature projects (opened for six months or more) is 93.7%. The housing rental business achieved operating income of 1.05 billion yuan in the first half of the year.

In 2019, Zhongjun Group Holdings clarified the core business development model of "one body and two wings" with real estate development as the main body and new retail shopping malls and long-term rental apartments as the two wings. It mainly promotes the mid-to-high-end long-term rental apartment brand FUNLIVE.

As of the 2020 interim report disclosure period, FUNLIVE has deployed in 15 cities with a management scale of 20,000.

Longfor Group’s 2020 interim report mentioned that the company’s long-term rental apartment brand Guanyu has opened a total of approximately 79,000 units.

As one of the company's main development channels, Crown Apartments is currently open and operating in first- and second-tier cities such as Beijing, Shanghai, Shenzhen, Hangzhou, Nanjing, Chongqing, and Chengdu.

The company stated that this part of the business will lay a solid foundation for the rental growth of the company's investment properties in the future.

In addition to real estate companies, there are also property companies involved in long-term rental apartments.

For example, Nandu Property, the company's 2020 interim report showed that the company's long-term rental apartment business achieved operating income of 12.462 million yuan in the first half of the year.

Data from China Research Network shows that as of 2019, about 25% of the top 100 real estate companies are directly or indirectly involved in long-term rental apartments, and more than 60% of the top 30 real estate companies are involved in long-term rental apartments.

Judging from the openings in 2019, the growth of the top 10 companies is relatively good. The new scale of Vanke Boyu and Longfor Guanyu accounted for nearly 60% of the new scale of long-term rental apartments of the top 10 real estate companies.

Although a certain proportion of real estate companies have deployed long-term rental apartment business, overall, the scale of each company's deployment is small, and the revenue from this business accounts for a low proportion of total revenue.

"Real estate companies may be optimistic about the future development space when deploying long-term rental apartments. Currently, real estate development is still the main business of real estate companies, and many long-term rental apartments are losing money, so the scale is small." Lu Wenxi, chief analyst of Centaline Real Estate Shanghai, told China Securities

According to a reporter from the newspaper, some real estate companies have spun off their properties and run them independently despite continued losses.

A reporter from China Securities Journal noticed that many real estate companies have announced the layout plans for long-term rental apartments during the year.

At the 2020 interim results briefing, Longfor Jitu CEO Shao Mingxiao said that he is confident in the long-term rental apartment business. It has a very large user base, and the number of users aged 21-35 is very large.

Coupled with the relatively low overall capital cost, it is expected to complete 100,000 openings and 2 billion yuan in revenue this year.

He said that Guanyu will start making profits this year. Although it is a small profit, it is a good start. In the future, the ratio of heavy assets to light assets will be deeply optimized.

At present, the overall gross profit margin of Crown Apartment is 32%-35%, and the occupancy rate of the project has reached 88.6% within 6 months of opening.

Zhongjun Group Holdings mentioned in its 2020 interim report that the company continues to pursue the development model of one body and two wings, focusing on the west coast economic circle, the central and western regions and the Guangdong-Hong Kong-Macao Greater Bay Area, and will continue to implement the two major projects of shopping malls and long-term rental apartments.

Grasp.

The company said it plans to deploy 200,000 long-term rental apartments across the country by 2025, with a managed rental scale exceeding 10 billion yuan.

Vanke A's 2020 interim report disclosed that as of the reporting period, the company still had 57,700 apartments planned and under construction.

China Research Network reported that from the perspective of market size, as of 2019, the rent scale of the housing rental market reached 1.3 trillion yuan, and the annual new rent scale was approximately 100 billion yuan.

According to data from the Ministry of Housing and Urban-Rural Development, the proportion of renters in first- and second-tier cities reached 50% in 2019, and the market share of large-scale housing rental companies was only 2%. The market development prospects of housing rental companies are promising.

Chen Xiao, an analyst at the Zhuge Housing Data Research Center, believes that the reason why more and more real estate companies are deploying long-term rental apartments is that, first, the housing rental market is huge and competition is currently insufficient; second, the net inflow of foreign population in hot cities is growing rapidly.

Housing prices remain high, demand for housing rentals is strong, and national policies are tilted, with clear proposals to accelerate the development of the housing rental market.

Policy support It is worth mentioning that national policies are frequently beneficial to the development of long-term rental apartments.