On June 8, Wen Wenya, general manager of Sichuan Huawei Property Management Co., Ltd., popped up a news on his mobile phone: Wanda Property will be sold by Wanda Group, and four companies including Zhongmin Property and Vanke Property will bid for it. The amount involved will be the largest case of property acquisition in China.
At that time, he didn’t know the connection between this news and Sichuan. One of the bidders for Wanda Property and the person in charge of Zhongmin Property in Sichuan recently confirmed to reporters that it had officially entered Sichuan at the beginning of the month to start the merger. Zhongmin Property is one of the eight key sectors of China Minsheng Investment Co., Ltd., the largest private investment group in China. Through the integration of holding and equity participation, Zhongmin Property was established only one and a half years ago, with a management area of 140 million square meters.
The insiders believe that the entry of Chinese property into Sichuan will intensify the competition among the giants for Sichuan property management enterprises, accelerate the integration of property management industry and completely change the industry ecology.
Giants speed up staking. Companies with a valuation of 5 million yuan talk about 50 million yuan.
Wen Wenya claims to be "living a good life"-the company manages about 4 million square meters of residential quarters and has a fixed income every year. However, when the person in charge of Zhongmin Property came to the door a week ago to propose a merger, Wen Wenya did not refuse. "The conditions he proposed are worth talking about."
The condition of Zhongmin Property is to acquire 51% equity to control his company. After the merger, the former promises not to interfere in its operation, and at the same time, it will introduce commercial resources such as finance and pension. The above-mentioned person in charge said that the target of equity merger and acquisition is the provincial property management company with a management area of more than 3 million square meters. "Industry consolidation has begun." Wenwenya paused and said, "If small and medium-sized properties are acquired sooner or later, why not consider a bigger company?" He believes that the property management industry lacks a price adjustment mechanism, and the labor cost, which accounts for more than 70% of the cost, is increasing year by year, but the property management fee is unchanged all the year round. If the giants are further squeezed, it will be difficult for SMEs to survive. The reporter learned from many sources that at least 13 property companies in the province, such as Chengdu Jiayuan Property, are also in contact with Zhongmin Property.
Since last year, Sichuan Jiabao Property, Vanke Property, Heda United Bank Property, China Shipping Property, etc., which have always only accepted the parent company’s real estate, have all started to acquire enterprises and undertake projects; Entering this year, the bidding among big bosses has become increasingly fierce. In May this year, Poly Property joined the Battle Group. Zhao Xiaying, Secretary-General of the Board of Directors of Chengdu Heda Lianhang Property Services Co., Ltd. revealed that the premium for the acquisition of property management companies by all parties has soared to 10 times-the property management company with a third-party agency valuation of 5 million yuan, the acquirer directly "adds a zero" and talks about equity mergers and acquisitions at a price of 50 million yuan.
Zhou Yong, deputy general manager of Chengdu Vanke Property Services Co., Ltd. said that last year, the company mainly exported APP platforms and technologies to other property management companies for free, indirectly mastering more owners’ resources; This year, it directly acquired and controlled the property management company. "This way is faster and more secure."
According to the china property management institute report, the top 100 domestic property services companies acquired more than 200 property services companies last year. Peng Jian, vice president of Sichuan Jiabao Asset Management Group Co., Ltd., said that the external expansion area of the company in the first half of this year has exceeded that of last year. Industry insiders estimate that within three years, Sichuan’s property management will be highly concentrated in the hands of a few giants.
Why do property management companies still want to make mergers and acquisitions because of their poor profitability?
It is the poor profitability of the property management industry that forms a huge contrast with the "throwing money" mergers and acquisitions by all parties.
Ma Cong, Secretary-General of the Property Committee of the Provincial Real Estate Association, said that the average profit rate of traditional property management companies with property fees as their main source of income is only about 5%. Due to meager profits, few enterprises have sought expansion for a long time, and the industry is highly dispersed. There are about 3,700 property companies in our province, most of which are small and micro enterprises. Take Chengdu as an example, among about 2,000 property management companies, 1,800 are third-class enterprises (the lowest level).
Why did Daxie suddenly make a big merger? Some people think that the industry is seeking large-scale operation. More people think that it is to compete for owners’ resources to open up the community O2O market. Community O2O, a business operation mode that integrates offline physical services with online Internet technology to meet the needs of community residents from "daily necessities" to "basic necessities", is widely regarded as the next trillion-dollar market.
The property management company is considered to hold the entrance to the O2O market. Compared with traditional e-commerce, the property management party is more likely to gain the trust of the owners. "The same online shopping, the property management company has high credibility and can deliver the goods to your door in 10 minutes." Zhao Xiaying further described his strategy as three stages: acquiring property management to seize owners’ resources-improving services to make owners agree-introducing O2O business model to make profits. "Community O2O is the main profit point in the future. But the premise is to seize enough owner resources now. "
The capital market is optimistic about the prospect of mergers and acquisitions. As far as listed companies are concerned, Color Life has been given a "buy" rating by many brokers, and China Shipping Property and China Olympics Home have also been reminded by brokers. At the beginning of this year, Sichuan Jiabao Asset Management Group Co., Ltd. successfully listed on the New Third Board, becoming the first listed property management company in Southwest China.
Others hold different views. Ma Cong said that in the face of competition from e-commerce companies such as JD.COM and Taobao, the expected income of property management companies is still unknown. Analysts at China Merchants Securities said that although the concept of property management is sought after, its attitude has become cautious. The core problem is how to turn the owner’s resources into profits. At present, there is no mature and sustainable profit model in practice.
Journalist investigation
Geometric influence of property management industry integration on community owners
Property services involve thousands of households. What impact will the large-scale integration of the industry have on issues such as property services and fees? The reporter conducted an investigation and interview on this.
Can property management keep up with the acquisition of residential area management?
The industry believes that large companies’ property services are more standardized and professional, and residential property services are often significantly improved after mergers and acquisitions. Since Vanke moved in in April last year, Li Tingting, the owner of Chengdu Yuntingyuan Phase III property, believes that "there are more young security guards and more active services." Liu Yingguo, the property management party and project manager of Jiaotong University Intelligent Property Management Co., Ltd., said that Vanke has established service processes such as customer service and security for it, streamlining personnel to free up funds and realize the rejuvenation of employees; Liu Xiaoping, the project manager of Hongshan Property, who was acquired by Color Life Service Group in March this year, also said that he had received training in five sectors, including security, engineering and environmental sanitation.
The reporter interviewed five property management companies with M&A cases, all of which are taking over the online platform of the community or preparing to go online to provide new services such as online shopping, repair and payment.
However, according to industry insiders, rapid expansion often faces the problem that management can’t keep up. Some residential areas in Chengdu have experienced a serious decline in the quality of property services and constant complaints from owners after mergers and acquisitions. Gou Qiang, deputy secretary-general of Chengdu Property Management Association, reminded that no matter whether expanding or developing diversified businesses, it should be based on quality property services.
Will the property management fee for large companies increase?
Generally speaking, well-known property management companies charge more than their peers. Does this mean that after large companies merge with small companies, the property management fees of the latter will increase?
The reporter interviewed four cases in this regard. Among them, the property management fees of Chengdu Xinli Park Mansion, which was taken over by Color Life, and Chengdu Yuntingyuan Phase III, which was taken over by Vanke Property, have not been adjusted at present; Although Zhongmin Property has not completed the merger yet, it said that it will not change the price of the property management fee of the acquired party; Peng Jian, vice president of Sichuan Jiabao Asset Management Group Co., Ltd., said that the property management fees of new projects have increased since last year.
"The increase in property management fees is often because large enterprises have to provide higher quality services and the cost is higher." Insiders said that the final price increase or not should be decided by the enterprise and the owner through consultation.
Acquired = barter? Can the owner refuse the merger?
"This is not carrying the owner barter? Why not go through the consent of the owners’ meeting? " It was not until three months later that Li Lanting, the owner, learned that Fang Hongshan Property, the property of Chengdu Xinli Park Mansion, had been acquired by Color Life Service Group. She resisted the merger because she was worried about the increase of fees by big companies.
According to China’s "Property Management Regulations", the hiring and dismissal of property service enterprises need to be approved by the owners’ meeting. However, Ma Cong, secretary general of the Property Committee of the Provincial Real Estate Association, believes that M&A is only a change in the internal equity structure, and the original property management company still exists. The original contract has not changed, so the owner’s consent is not required.
Ma Qu, a lawyer of Sichuan Junhe Law Firm, said that the acquirer has the obligation to inform the owner of the situation in time. If the owner is dissatisfied with the post-merger service, he can still change the property management party according to the contract. (Reporter Xiong Xiaowei)