Evergrande Takes the Lead Under Adverse Conditions Within the Regulation Period

BEIJING, Aug. 9 /PRNewswire-Asia/ -- On August 9, Evergrande Real Estate Group released the sales presentations for July in Hong Kong. According to the sales presentations, Evergrande achieved total contracted sales of 5.08 billion yuan in July, and the accumulative contract sales amount in the year reached 26.06 billion yuan. In the Jinan market, which made a contribution of more than 20% of Evergrande's performance in July, Evergrande has successively launched two projects, Evergrande Oasis and Evergrande Metropolis, and achieved monthly sales of 1.1 billion yuan simultaneously. What has attracted much concern in the industry is that it took less than six months for the above two projects from land acquisition to opening. An original report from Sina Leju assesses the situation as follows:

With a seemingly contradictory relationship between possessing the largest land reserve but never hoarding the land, Evergrande achieved a good balance between the super-large area of construction in progress and high-speed development pace.

Competition of real estate enterprises tests the development speed

In the real estate market, the development speed is a comprehensive reflection of the value creation ability and the value realization ability of an enterprise. Under most circumstances, the value creation ability and the value realization ability are not only mutually exclusive, but also constrained by the impacts of capital strength, land reserve, market judgment and other factors.

In this case, most of medium- and small-size real estate enterprises choose slow development, and even adopt secret sites to sell in the sales section so as to achieve the maximum benefits; if the development speed leads the industry, it means that there is more volume available within limited time, which also provides more possibilities for the achievement of sales.

For this reason, the performance of the real estate enterprises for the development speed is uneven, and there is no lack of enterprises delaying delivery as far as possible and ready to get the land appreciation dividends without authorization, while the general development and launching period is two to three years. Of course, there are also enterprises committed to reducing the development period and pursuing shorter development speed. Evergrande, by pursuing the development speed of less than six months as the target, has drawn the attention of the industry.

Evergrande, in pursuit of speed, transfers land profits to house buyers

According to the insiders, Evergrande issues special documents to stipulate the completion node requirements for all work on the day when it gets the land, and specifies the assessment objectives and the evaluation weight of all work. While relying on the company's collectivization and intensive management mode, Evergrande internally requires that the planning design, government application for construction, construction organization, supply of raw materials and other work must be completed in a short time. Evergrande formed a strategy of quick land acquisition, rapid development and fast sales of fine-work properties at mid-range prices, vacating the profit of the land appreciation to the house buyers, to drive the market to notice Evergrande's speed.

Meanwhile, Evergrande implemented standardization of engineering management and quality control systems, and even of marketing promotions, and gave priority to the engineering construction of model houses, comprehensive buildings, project gates and garden landscapes. It is believed by insiders that "Such practices do not only present the quality image of the project to the maximum extent in a short time, but also achieve the promotion of rapid sales while the project quality is ensured. Of course, the executive force of Evergrande's staff reflected in this process cannot be ignored."

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SOURCE Sina Leju