Quarterly report analysis
In the second quarter of 2024, China's housing rental market will enter an era of "stock transformation as increment". On the policy side, "stock revitalization" has become a key policy keyword in China's housing rental market, and financial and tax support policies continue to exert force. All localities have implemented national policies and successively issued detailed rules for "stock revitalization". On the market side, the supply of room size continued to grow, the average rent decreased year-on-year and quarter-on-quarter, and the occupancy rate remained stable.
First half of 2024
Sorting out the policies of the housing rental industry
More than half of the "14th Five-Year Plan" affordable rental housing has been raised, and on the basis of the two-wheel drive of "new construction + renovation" in the previous three years, all localities have begun to turn to stock revitalization and urban renewal. Through the issuance of housing rental asset securitization products and the expansion of financing channels, the financial pressure in the process of revitalizing the stock of real estate has been alleviated, and the support for the revitalization of the stock has been enhanced.
For the policy inventory in the first half of the year, please refer to the "Policy Inventory of the Housing Rental Market in the First Half of 2024: Financial Support & Stock Revitalization, a Two-pronged Approach".
Q2 2024
Housing rental market analysis
Judging from ICCRA's long-term monitoring of the operation of more than 60 centralized rental housing brands and the housing rental market in 16 hot cities, in the first half of 2024, the scale of the mainland housing rental market continues to expand, and enterprises adopt the strategy of "exchanging price for volume" in order to maintain the occupancy rate, and the national occupancy rate is stable and the average rent is declining.
■ The scale of housing continues to grow, and the agglomeration effect of first-tier cities is becoming more and more obvious
As of the end of the second quarter of 2024, 60 housing rental companies have opened a total of 3,577 stores, an increase of 10% quarter-on-quarter and 27% year-on-year. The total number of rooms opened was 1,042,852 units, an increase of 3% month-on-month and 22% year-on-year.
From the perspective of store distribution, the agglomeration effect in first-tier cities is more obvious, with the total number of opened rooms in Beijing, Shanghai, Guangzhou and Shenzhen accounting for about 52%, an increase of 3 percentage points from the previous quarter.
From the perspective of future new market supply, as of the end of the second quarter, the number of stores that have been signed but not opened by 60 housing rental enterprises across the country was 459, and the room scale reached 320,465 rooms (sets), a slight decrease from the previous quarter.
Rental communities and youth apartments firmly occupy the main supply position, and the potential supply of rental communities accounts for 58% of the overall new market supply; The potential supply of youth apartments accounts for about 22%.
■ "Price for volume", the average rent level has declined to ensure a stable occupancy rate
In the first half of 2024, the rental level of institutionalized projects in 16 hot cities declined significantly, and the occupancy rate remained stable. The average monthly rent of the 60 housing rental enterprises reached 3,038 yuan, down 8.1% month-on-month and about 3% year-on-year. The average occupancy rate was 91%, and the average occupancy rate decreased slightly by 2 percentage points month-on-month while the supply scale increased by 10 percentage points, which is already a good performance. The impact of the economic downturn has also been transmitted to the housing rental market, with companies reporting a downward trend in lease length and renewal rate. Judging from the data, the average renewal rate in the second quarter of 2024 decreased by about 5 percentage points from the previous quarter, and the average renewal rate remained at 59%.
The proportion of non-rental income remained stable, with an average non-rental income accounting for about 3.97%. However, the statistical caliber of "non-rental income" in the industry still needs to be further clarified, especially as more and more enterprises want to issue public REITs for affordable rental housing, and the industry urgently needs to form a unified standard in terms of income identification.
■ The product classification pattern is basically formed, and each product line can drill down to a more market segment
From the perspective of product types, the position of the main market of the two categories of products of youth apartments and rental communities has been established. Among the projects that have been opened, the supply of youth apartments accounts for half of the market, but from the perspective of potential supply, the supply of rental communities will be divided from youth apartments in the future, becoming the absolute main supply of the market.
In the face of increasingly diversified market demand, there are still market segmentation opportunities for various product lines. For example, in high-end apartments, compared with traditional serviced apartments, lifestyle apartments are increasingly favored by the younger generation; In youth apartments, product differentiation is also an inevitable trend for young people at different stages of life. Moreover, the revitalization of more and more stock assets also brings more imagination to the segmentation of product lines.
Drafting: ICCRA
From the perspective of the operating performance of each product line, the rental community is more stable, the occupancy rate and lease renewal rate are the same as the previous quarter, and the rent decline is smaller than that of youth apartments.
Drafting: ICCRA
■ The public offering of rental housing REITs is running smoothly and is expected to expand in scale
In the first half of this year, rental housing REITs rose by 16.56%, ranking first among all public REITs, far surpassing the second industrial park REITs (9.58%) and the third warehousing and logistics REITs (2.76%), mainly due to the stable yield of affordable rental housing and the ability to resist economic cycles. For a detailed analysis, please refer to the "2024 Q2 Affordable Rental Housing REITs Monitoring Report".
Brand value ranking for the second quarter of 2024
Source: ICCRA
Source: ICCRA
Source: ICCRA
Source: ICCRA
Source: ICCRA
Source: ICCRA