Chapter 213 October 19 Limited Land Bank Strategy

According to the research on China's real estate market, Feng Lun put forward the "Land Infinity Theory", that is, because of the large area and the many rounds of urban development, for real estate companies, the land is almost unlimited.Therefore, it is not advisable to regard land reserves as development opportunities and strengths.Corresponding to this theory, Vantone Real Estate adopts a "limited land reserve strategy". Vantone Real Estate currently has a total land reserve area of ​​about 3 million square meters, which can meet the company's development needs for 2 to 3 years. This is completely different from most real estate companies that use land reserves as the company's development potential and strength.

In 2007 and 2008, many real estate companies set off a climax of the land enclosure movement, and for a while "land kings" emerged frequently.Feng Lun has always looked at this with a cold eye; even some media listed "insufficient land reserves" as Vantone's "flaws", and he did not take it seriously. Vantone only makes operational land reserves, not inventory land reserves. As a result, the development speed of Vantone Real Estate is not slow at all.Industry researchers believe that Vantone Real Estate is the best example of taking into account the stability of a turtle-shaped company and the growth of a rabbit-shaped company.

Compared with many companies that blindly acquire land, Vantone's research is how to change land from inventory reserves to operational reserves.Now after a general company acquires land, the land is only inventory in the first year. Compared with many companies that blindly acquire land, it will be pre-sold in the second year, have income in the third year, and profit in the fourth year. Faster ones will take three years. profit.Therefore, if the land reserve is large, the inventory will be large, and the debt will be high.Many listed companies currently have negative net cash flow, which is a hidden worry.

Having more wives does not necessarily mean happiness, and having more land does not necessarily make money——Feng Lun comments on the troubles caused by land reserves To measure the quality of a real estate company, especially a listed real estate company, we should not only look at the amount of funds or land it owns, but whether it has sufficient cash flow, low debt ratio and advanced business model.