Luo Shouyao: Continue to Collect Lease Waiting for Investment Opportunity
With high prices at the top, Yutai Xing Luo and Shou Yao pointed out that with rising construction costs and high land prices, they would rather maintain a “defensive” investment strategy, continue to maintain property rent, and wait for investment opportunities.
However, he believes that the chance of a sharp drop in property prices is not great.
Yutaixing, one of the small and medium-sized real estate developers, has not been very active in the real estate market in recent years. Properties that were completed several years ago, such as Mongkok Dohui and Sai Yingpan Weifeng 99, have not been sold, but they continue to retain rent. In addition, the Group has not absorbed earth reserves in the official market in recent years.
When interviewed by Mr. Luo Shouyao, Managing Director of Yu Taixing, said that the group is still tending to retain the rent of the whole building, which can retain the integrity of the ownership and it is also more convenient to manage. In recent years, these types of properties with unified ownership have been closely watched by the market. Luo Shouyao also admitted that in the past, funds and investors had negotiated with them for their properties. However, Luo believes that under the current market, after selling properties, It is also difficult for the repatriated funds to invest again.
Cost of residential construction increased 4 times in 7 years
The most important reason he pointed out is that the current construction costs are too high. “The average cost of construction of small and medium-sized residential buildings is about 3,000 to 4,000 yuan per square foot. If there are platforms, clubs and other facilities, it will be more expensive. Compared to about 6 or 7 years ago, construction costs have risen by about 3 or 4 times." In addition, the official land premium of the government has also increased rapidly. The development of mainland developers to the south and down to Hong Kong has made the competition in the land market in recent years increasingly fierce. More rampant and large-scale land plots usually fall into the hands of large-scale developers. Small and medium-sized developers also It is difficult to compete with them. Even for smaller-scale plots, there are large-scale developers participating in the auctions. In the end, only some pig skulls are used, but their attractiveness is obviously reduced.
Yu Taixing used to increase land reserves through the acquisition of old buildings in the urban areas from time to time. As property prices in urban areas have increased in recent years, the asking prices of small property owners have also become increasingly aggressive; some old buildings may have exhausted their plot ratios, even if they are rebuilt. It may not be able to increase the number of buildings that can be built; in addition, the government’s hot tricks introduced in recent years have increased the costs for developers when acquiring old buildings. Therefore, for Luo Shouyao, since the cost of goods exchange is so great, Simply maintain a more conservative investment strategy,