Steady improvement in both quality and quantity of property delivery in the Greater Bay Area
HONG KONG, March 27, 2024 /PRNewswire/ — Guangdong Land Holdings Limited (“Guangdong Land” or the “Company”) released its 2023 annual results announcement on 25 March 2024.
A series of easing measures, such as “down payment cuts”, “interest rate cuts” and “relaxing the housing mortgage requirements”, were implemented for the real estate industry in the second half of 2023. Guangdong Land proactively and quickly adjusted its leasing and sales strategies of each project in line with the market policies and trends, and smoothly achieved the full year leasing and sales targets. The consolidated revenue of Guangdong Land for 2023 was approximately HK$3,877 million (2022: HK$1,378 million), representing an increase of approximately 181.4% year-on-year. For the year under review, the total gross floor area (GFA) contracted (including completed properties held for sale and properties held for sale under development) was 274,000 sq. m., representing an increase of 62.1% year-on-year; the GFA delivered was 222,000 sq. m., representing an increase of 192.1% year-on-year.
In-depth control of property quality to demonstrate the delivery capabilities of state-owned enterprises
Guangdong Land has strengthened its branding as well as the implementation of quality delivery and value promotion system, achieving an annual delivery rate of exceeded 95%, which is much higher than the industry average. At present, the delivery work of Guangdong Land’s projects has been standardized and continuously optimized. The properties, before commences delivery process, will go through the preliminary screening and the risk management planning, and Guangdong Land will monitor the delivery process in details and ensure that the properties have reached the required delivery standard through comprehensive evaluation by various parties. Last year, Guangdong Land made new breakthroughs in its delivery work, for example, the properties of the Zhongshan GDH City Project were delivered by adopting a model of owner-centered multi-points one-stop process, supplemented by “N to 1” pilot inspections and quick repair services, instead of the traditional assembly-line style reception process for real estate projects. The new delivery work has greatly enhanced the owners’ sense of exclusivity and gradually increased their satisfaction. With high-quality delivery services, Guangdong Land has rolled out a new model of property delivery process.
In terms of project quality, in the past two years many projects from Guangdong Land have been included as candidates for the “Guangsha Prize”, including Foshan Laurel House, Zhongshan GDH City, Shenzhen GDH City and Guangzhou GDH Future City. The “Guangsha Prize” aims to implement the development concepts of “innovation, coordination, environmental, openness and sharing” and meet people’s demand for a better living life and lead the high-quality development of the real estate industry. The award is coordinated by the national evaluation and recognition team and it is also one of the most credible real estate awards in China. Various classic projects of Guangdong Land had been shortlisted, fully demonstrates the Company’s pursuit of precision work quality and its creativity. Guangdong Land’s high delivery capacity and fabulous product quality will provide support for the property sales price and volume, and promote the awareness and reputation of Guangdong Land in the Greater Bay Area.
Remarkable results in cost reduction and efficiency improvement further optimizing financial structure
Against the backdrop of various economic challenges globally, and given the spreading risk of debt default by the PRC real estate companies in the past year, Guangdong Land continued to expand diversified funding channels while strengthened cost and risk management. In terms of cost control, the Company implemented cost control plan throughout the whole process, further strengthened cost reduction and efficiency in construction costs and sales, management, and financial expenses. In terms of financial and capital management, Guangdong Land explored all potential to broaden its financing channels, and successfully obtained insurance debt financing of RMB4 billion. As at 31 December 2023, the weighted average effective interest rate per annum of the bank and other borrowings of Guangdong Land was 4.02%, which showed the downward trend and the cost of development loans has also been controlled at a low level.
In terms of risk prevention and control, Guangdong Land has taken multiple measures to strictly control operational risks and reduce the scale of liabilities, increase sales proceeds recovery, and repay part of related party loans. As at 31 December 2023, the interest-bearing borrowings amounted to approximately HK$23.9 billion in aggregate, a decrease as compared to the end of 2022. With its enhanced resilience and broaden operating space, Guangdong Land successfully obtained the first-grade qualification certificate for real estate development enterprise and compliance management certificate (ISO37301), and its main credit rating also upgraded from AA to AA+, laying a solid foundation for its stable, healthy and sustainable development.
Dual Development of Leasing and Sales Projects, Focusing on High-Quality Developments and Concentrating on the Layout in the Greater Bay Area
In the previous year, Guangdong Land has actively focused on optimizing the sales strategies, accelerated the sale pace through multifaceted measures guiding by structural market intelligence. Many projects acquires approbation of customers and the market. According to third-party market data, Guangzhou GDH Future City has experienced remarkable sales performance since its pre-sale. The project ranked first in sales amount of online contract registration in Baiyun District in both the second half of 2022 and the whole year of 2023. At the same time, its residential sales amount of online contract registration in 2023 ranked seventh among Guangzhou’s multi-million-dollar luxury housing projects, while its apartment sales amount of online contract registration in 2023 ranked eighth in Guangzhou. By the end of 2023, approximately 40% of the residential and apartment units in the Guangzhou GDH Future City Project have been sold, and the overall sales volume is greater than that of other projects in the region.
In order to further improve the commercial operation strength of Guangdong Land, the Company actively explored a series of initiatives and achieved favorable results. Last year, Guangdong Land rearranged the structure of the commercial operation team, and introduced management personnel with comprehensive operation experience from the market, which had strengthen team capability and increased marketing effectiveness. Leasing operation of operational assets made new breakthroughs and was named “2023-2024 China Office Operation Benchmark Enterprise” by House China Research Institute. The overall operation of the shopping mall projects held by Guangdong Land has been stable and gradually achieved a high occupancy rate. Among them, the Shenzhen Teem of Shenzhen GDH City Project has commenced business for one year, and both of the occupancy rate and opening rate have exceeded 90%. Its offices adopted “value quality customers + rental rate preferred” property leasing strategy to attract quality customers, while proactively collaborated with the Luohu District government, Jewelry Association, surrounding enterprises and held promotion activities to facilitate office leasing and sales.
Guangdong Land has always adhered to the strategic positioning as “the influential, comprehensive development expert in the Greater Bay Area” anchored a number of cities with development potential in the Greater Bay Area. With the continuous introduction of favorable policies in the Greater Bay Area and the formation of the “one-hour living circle”, it got unprecedented opportunities in the Greater Bay Area. Guangdong Land’s projects are located in the core cities of the Greater Bay Area, including Foshan, Zhuhai, Zhongshan, Jiangmen and Huizhou, etc., which will benefit from the rapid development momentum of the city cluster in the Greater Bay Area and their connectivity of infrastructure and transportation, and continue to provide solid pillars for the Company’s performance.
Outlook
In 2024, Guangdong Land will strive to overcome the enormous challenges on its operations arising from the profound adjustment of the sector by accelerating the sales of existing projects and making timely adjustments to optimize the sales strategies of various projects based on monthly monitoring and quarterly adjustments. Guangdong Land will improve the quality of its products and services, upgrade its product design, optimize the control system for its project quality, and enhance the product delivery and property service experience. By establishing a series of guidelines, Guangdong Land will further reduce construction and installation costs and strictly control sales, management and financial expenses. The Company will also strive to expand new projects in a diversified manner to realize its stable, healthy and sustainable development.
Over the four years of The Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area released, Guangdong, Hong Kong and Macao embrace continuous and profound integration, and have gradually showed a high-quality synergetic development trend, demonstrating increasing siphoning effect of the Greater Bay Area. In 2024, the Greater Bay Area, as an important economic growth accelerator, is expected to continually attract many populations and talents onwards. As people in the Greater Bay Area will continue to require higher housing quality, especially the core cities in the region, where demand for basic and improved housing remain strong, the real estate market in the Greater Bay Area will still have a solid foundation for its long-term stable development. As the economy of the Greater Bay Area maintains a strong growth momentum, the projects held by Guangdong Land, are all located in core cities of the Greater Bay Area, will benefit from the strong development momentum of this region. In the coming year, Guangdong Land will also adhere to the existing strategies of achieving regional deep cultivation in the core area of the Greater Bay Area and city-specific approach, gradually optimizing the investment layout in cities of various levels, and enhancing the Company’s ability to withstand the cyclical fluctuations of the property development industry.
Source : Guangdong Land Announced 2023 Annual Results
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