KE has acquired land in first-tier cities

Author | Zhou Zhiyu

On the last day of 2024, a "new entrant" entered the land auction market in Shanghai.

On December 31, the second day of the 8th batch of land auctions in Shanghai concluded. In front of veteran players in Shanghai's land auction market such as Poly Real Estate, Xiangyu, and the Tianan joint venture, Beike Group's Beihome successfully acquired the only piece of residential land available for sale that day. The final transaction price was 697 million yuan, with a premium rate of 13.9%, equivalent to a floor price of 22,781 yuan per square meter.

This is Beihome's first successful land acquisition in a first-tier city. In a land auction market where leading state-owned enterprises are also cautious about acquiring land, Beihome's move has attracted industry attention.

According to Wall Street News, the Fengxian project has a plot ratio of 2.0, initially positioned for first-time buyers and those upgrading their homes, and will be fully operated by Beihome.

In terms of location, the Fengxian project is situated in the core area of Fengxian New City, with mature supporting facilities. Although the nearby Longhu Guancui is positioned for first-time buyers, it has sold out three times.

Insiders close to the project indicated that the overall scale of the Fengxian project is not large, but the location is relatively mature. Beihome hopes to create a model through the independent operation of this project, allowing the outside world to better understand Beihome's C2M (Customer to Manufacturer) concept.

Beihome's CEO Xu Wangang stated that through the successful operation of this project, they hope to further validate the implementation capability of the C2M product solution in different cities and for different demographic needs, continuously enhancing partners' trust in the "1+2 business model."

The so-called "1+2 business model" consists of "1," which is based on the C2M concept, exploring user needs to form precise product positioning and design solutions; and "2," which refers to the financial support services and integrated online and offline marketing services that Beike can provide.

To further implement the C2M concept, by the end of 2024, Beihome will also launch the "Co-Building a Good Home" online community. Users can log into the Beike APP to access the "Co-Building a Good Home" page to browse and evaluate two product design solutions launched simultaneously for the Fengxian project.

In the future, Beihome's "Co-Building a Good Home" online community will also be open to the entire industry and the public, covering more cities and more plots. Relevant plots will feature different product design solutions provided by third-party design institutes on the "Co-Building a Good Home" platform, allowing users to directly participate in the evaluation and co-construction of design solutions.

Before the Fengxian project, Beihome had previously acquired the Jin San H12 plot in Chengdu in September this year and announced independent operation. However, Beike emphasized that through project operation, they hope to validate the implementation capability of their C2M product solution and aim to provide this capability to developers, owners, and construction partners, creating a data-driven residential development service platform to build a new model of real estate development based on C2M.

Implied is that Beike does not intend to become a real estate developer or earn investment returns through large-scale funding. Instead, they aim to reshape the traditional development process, focusing on user needs to develop design capabilities, as well as financial and marketing service capabilities Currently, Beihome's "1+2 model" has been implemented in cities such as Xi'an, Beijing, and Hangzhou. Among them, the Chang'an Huaxi Mansion project in Beijing sold out all units during its initial launch, achieving sales of 1.6 billion yuan.

Li Yujia, the chief researcher at the Guangdong Provincial Housing Policy Research Center, believes that 2024 will be the year of the most intense competition among developers, with most facing difficulties in selling homes. As Beike possesses micro big data on end-user demand and understands demand characteristics and changes, this presents a prime opportunity for its transformation.

In 2023, Beike officially announced a strategic layout adjustment to "one body and three wings," with Beihome serving as Beike's residential development service platform. Beike hopes to leverage the Beihome platform to integrate industrial capital and internet thinking, driving rapid transformation in the real estate industry.

Following the Fengxian project, Beike also aims to conduct a series of trials in multiple cities, encouraging more developers, property owners, and construction agents to adopt the Beihome "1+2 model."

According to Wall Street News, in 2025, Beihome will focus on expanding its business in over a dozen cities, including Beijing, Shanghai, Guangzhou, Chengdu, Xi'an, Hangzhou, Nanjing, and Wuhan.

This means that next year, we will see Beike's presence more frequently in the land auction market. Whether it can explore more possibilities for the development of the real estate market through this series of attempts, Beike needs to continuously create convincing examples