The first-level development of land can be led by the land reserve institution, which is responsible for raising funds, planning, project approval, land acquisition, demolition and large-scale municipal construction, and organizing the implementation. In this case, the development enterprise only acts as the trustee of the land reserve institution, specifically carrying out the first-level development-related affairs, and the management fee (profit rate) of the development enterprise is 2% of the development cost.
For example, development enterprises are responsible for fund raising, planning, project approval, land acquisition and demolition, and large-scale municipal construction. And organize the implementation, the profit rate is 8% of the development cost.
Characteristics of first-class land development business
* Capital-intensive. The first-class land development business is a capital-intensive business, and the capital demand often reaches several hundred million yuan or several billion yuan.
* Financing difficulties. Most of the enterprises engaged in first-level development are project companies established for projects, so it is difficult to raise funds. The reasons are as follows: (1) The enterprise has been established for a short time, lacking operating performance, and the market reputation and bank credit have not been established; (2) The enterprise lacks fixed assets or other effective property as financing collateral. In the first-level development stage, the land use right is not owned by the development enterprise, and the enterprise cannot be used for mortgage financing; (3) Affected by the national macro-control policies, the bank's loans to the real estate industry, including land-level development, are in a state of contraction. The document of China People's Bank 12 1 clearly stipulates "strictly control the issuance of land reserve loans", which makes it more difficult for all kinds of first-class land developers to obtain financial support from banks. (4) Lack of direct financing channels such as bonds and stock listing.
* Stable demand. Land is a resource commodity and the front-end link of the real estate industry chain. However, the contradiction between the scarcity of land and the growth of social demand is increasingly prominent, which will make the land in the process of value-added for a long time. There is basically no value risk in the first-level development business of land processing transactions, and the liquidity risk is relatively small.
* The first-level land development process is simple, and the corresponding capital roadmap is clear. In terms of cash flow, the funds are mainly used for land acquisition and demolition, municipal infrastructure construction and other related expenses. Because the sub-markets such as land acquisition, demolition and municipal affairs are relatively mature and transparent, the legal and policy system is relatively complete. Therefore, the process and cost of the first-level development can be controlled, and a more accurate budget can be made in advance. 8% of the development profits are basically guaranteed by policies. The above characteristics determine that the first-level development of land and the second-level development of real estate have different risk-return characteristics, which is a business with low risk and stable income.
* The development direction of primary land development business is government-led and market-oriented operation. Judging from the evolution of relevant policies, the government has gradually changed from a direct participant in the market to a rulemaker and industry regulator, and promoted the development of the land market by cultivating market players and strengthening market supervision. From the formulation of planning to the planning and management of land supply and the management of land entering the market, the leading role of the government is reflected. At the same time, the government is also actively cultivating qualified market players and maintaining moderate competition.
* The development direction of primary land development business is to cultivate market-oriented primary land development subjects and implement market access system.
Article 4 of the Interim Measures for the Administration of Land Reserve and Primary Development in Beijing stipulates that "land reserve development adheres to the principle of government-led and market-oriented operation, and can be undertaken by land reserve institutions or real estate development enterprises with corresponding qualifications through bidding." In the future, only honest and powerful development enterprises can operate the first-level land development, and the improvement of market access threshold will further enhance the overall quality of the first-level land development enterprises and reduce the financing risk.
Recently, the bidding policy of Beijing's first-level land development has been approved and will be formally implemented, which means that Beijing's first-level land development will enter a more market-oriented and transparent operation track.