Middle Finger Research Institute: By the end of 2024, many long-term rental apartment stores will open. The opening scale of the TOP 30 enterprises continues to increase.

The China Index Research Institute released a document stating that at the end of the year, many chain rental apartment stores were opened, and the opening scale of the TOP 30 companies continued to increase. According to statistics from the China Index Research Institute, in December 2024, the total number of rooms opened by the TOP 30 centralized chain rental apartment companies reached 1.256 million, an increase of approximately 30,000 from November. In terms of classification, among the TOP 30 openings, there were 12 real estate companies involved in housing rental, 7 local state-owned enterprises, 6 entrepreneurial companies, 3 hotel companies, 1 intermediary company, and 1 financial company. At the end of the year, many chain rental apartments were opened, and the scale of openings for entrepreneurial companies, local state-owned enterprises, and hotel companies increased by 19,000, 18,000, and 1,000 rooms respectively. Due to changes in the list, compared with November, the opening scale of real estate companies decreased by 8,000 rooms. Management scale list: TOP 30 companies collectively manage 1.82 million rooms According to the China Index Research Institute, in December 2024, the TOP 30 centralized chain rental apartment companies collectively managed 1.82 million rooms, an increase of approximately 20,000 from November. In terms of classification, among the TOP 30 management, there were 12 real estate companies involved in housing rental, 8 local state-owned enterprises, 6 entrepreneurial companies, 3 hotel companies, and 1 intermediary company. Compared with November, the scale of management for real estate companies, hotel companies, and entrepreneurial companies increased by 19,000, 17,000, and 15,000 rooms respectively. Among them, Urban Homestay and Vanke Residences saw significant increases in management scale, adding 15,000 and 10,000 rooms respectively. Residential rent price index trend (I) Rental prices in 50 cities: In 2024, rental prices in 50 cities decreased by 3.25% cumulatively, with all-tier cities experiencing declines. Overall rent prices: The average rent prices in 50 cities saw a slight decline, with only minor increases during the Spring Festival and graduation seasons. Since August, the decline has expanded. In 2024, the average residential rent prices in major cities saw a slight decline. According to the residential rental price index for 50 cities, in 2024, the average residential rent prices in the key 50 cities nationwide cumulatively decreased by 3.25%, a 2.95 percentage point increase from 2023. In December, the average residential rent in 50 cities was 35.4 yuan/square meter/month, down by 0.55% from the previous month. Overall, the demand in the housing rental market in major cities remained relatively stable, but the significant increase in market supply due to the large number of rental units entering the market, coupled with pricing restrictions, intensified market competition, leading to a slight decline in the average residential rent in major cities. Seasonal effects are prominent, with rental prices showing temporary increases during the "return to the city season" after the Spring Festival and the mid-year "graduation season." Throughout the year, only during the "return to the city season" after the Spring Festival and the mid-year "graduation season" in March and June-July 2024, the residential rents in 50 cities saw marginal increases, while in the remaining months, rents declined. Since August, the industry has entered the off-season, with a noticeable decrease in market demand and an expansion in the decline of residential rents in major cities. City rents: In 2024, the residential rents in 48 cities decreased, with all-tier cities experiencing declines. Looking at the changes in rent prices in various cities in 2024, out of 50 cities, only 2 cities saw a cumulative increase in residential rents, while 48 cities saw declines. Specifically, in 2024, only Beihai and Urumqi saw an increase in average residential rents, with a cumulative increase of 3.53% in Beihai and 1.39% in Urumqi. The rest of the 48 cities experienced cumulative declines in rent, with cities like Wenzhou and Hangzhou seeing declines of over 5%, and cities like Lanzhou and Ningbo seeing declines between 3% and 5%. Cities like Dalian and Dongguan saw declines between 1% and 3%, while cities like Hohhot, Quanzhou, and Harbin saw declines of less than 1%. In tiers, the average residential rents in all-tier cities decreased. According to the residential rental price index for 50 cities, in 2024, the average residential rents in first-tier cities cumulatively decreased by 2.82%, compared to a cumulative increase of 1.32% in 2023; average residential rents in second-tier cities cumulatively decreased by 3.56%, with a 3.3 percentage point expansion from 2023; and average residential rents in third and fourth-tier representative cities cumulatively decreased by 2.82%, with a 1.5 percentage point expansion from 2023. (II) Investment return rate: The rent-to-price ratio continues to slightly increase, and the investment return rate for housing rentals has improved In 2024, due to continued adjustments in house prices, the rent-to-price ratio in key cities continued to increase compared to the end of 2023. In December 2024, the rent-to-price ratio in 50 key cities was 2.12%, an increase of 0.09 percentage points from December 2023 (2.03%). Among the specific cities, out of the 50 cities, except for Sanya and Jiaxing, the rent-to-price ratio in the other 48 cities increased compared to the end of 2023, with cities like Changzhou, Dongguan, Xuzhou, and Wuhan seeing significant increases. In terms of absolute levels, as of December 2024, the rent-to-price ratio in cities like Xiamen, Shenzhen, and Beijing remains low, below 1.5%; while cities like Guangzhou and Shanghai are gradually approaching 2%; Chongqing, Changsha, and other second-tier cities have rent-to-price ratios close to 3%, and cities like Harbin and Changchun have ratios exceeding 3%, with Guiyang having the highest ratio at 3.23%. Currently, the real estate market is in a downward cycle, with continuous adjustments in house prices. However, the housing rental market benefits from the characteristics of rigid demand and the improvement in industry regulations, maintaining relatively stable demand, with rent adjustments being more moderate. As a result, in recent years, the rent-to-price ratio in key cities in China has continued to rise. As of now, the average rent-to-price ratio in the key 50 cities is 2.12%, already higher than the five-year fixed deposit interest rate, indicating an improvement in investment returns for housing rentals. However, compared with the comprehensive cost of funds for residents to buy houses (currently estimated by the China Index at around 2.6%-2.8%), there is still room for further increases. In August 2024, the People's Bank of China mentioned in the "Supporting the Sustainable Development of the Housing Rental Industry" column in the "Second Quarter 2024 Chinese Monetary Policy Implementation Report": "In the future, with the gradual economic recovery, rents are expected to steadily increase in the long term, and the overall yield of rental housing is expected to increase to over 3% based on the static rent-to-sale ratio, exceeding most asset returns." "In recent years, with the increase in the rent-to-sale ratio and the decrease in financing and operating costs, the commercial sustainability of the housing rental industry has been enhanced. More and more housing rental companies are entering the market, operating on a scale and intensively, which will help provide higher quality and stable rentals".Housing servicesAnalysis of Tenant Characteristics To fully reflect the rental housing situation of residents, understand the current rental preferences and pain points of residents, since June 2022, the China Real Estate Research Institute has conducted a national tenant questionnaire survey every six months to depict the tenant profile. By the end of 2024, a total of 6093 valid samples were collected from the national tenant survey questionnaire. (1) Tenant Profile: New graduates prefer long-term rental apartments and are willing to pay higher rent for high-quality services and facilities Basic characteristics of tenant groups: 25-34 years old, high education level, graduated within 1-5 years The survey results show that 54% of the surveyed tenants are aged between 25-34, 63% have a bachelor's degree or above, 68% have graduated within the last 5 years, and 65% of the surveyed tenants have a monthly household income ranging from 3000-10000 yuan. In terms of renting, 76% of the surveyed tenants choose to rent the entire property, 59% have a monthly rent between 1000-3000 yuan, and 53% have a rental area between 10-60 square meters. In terms of household size, singles and small families of 2-3 people are the main tenants. In major cities such as Beijing, Shanghai, Guangzhou, Shenzhen, and provincial capitals, about a quarter of respondents live alone, which is relatively high. In terms of housing types, individual properties are still the main type of housing, with over a third of tenants in major cities living in dispersed long-term rental apartments, and about 15% living in centralized apartments in prefecture-level and above cities. Characteristics of different rental property customer groups: Tenants in long-term rental apartments have a shorter graduation period and are willing to pay higher rent for services and facilities Looking at the residential sources of tenants, nearly half of the surveyed tenants live in individual properties, with 33% living in dispersed apartments and 15% living in centralized apartments. In terms of education, 68% of tenants in centralized apartments have a bachelor's degree or above, which is 7 percentage points higher than individual properties. In terms of graduation years, whether in dis...The rental market is constantly improving, with an increasing number of public services available, far exceeding individual housing (1%) and scattered housing respondents (2%).Development of Affordable Rental Housing (1) Collection of Affordably Priced Rental Housing: The construction progress of affordably priced rental housing accelerated continuously in 2024, with many provinces and cities completing annual goals ahead of schedule The construction, collection, and supply of affordably priced rental housing nationwide have accelerated. During the "14th Five-Year Plan" period, the country plans to collect and construct 8.7 million sets of affordable rental housing. By the end of 2023, approximately 5.73 million sets of affordable rental housing have been constructed, achieving 66% of the "14th Five-Year Plan" target. On December 27th, the Ministry of Housing and Urban-Rural Development made it clear that "since this year, various regions have increased the construction and supply of affordable housing, constructing and collecting a total of 1.72 million sets of shared and rented affordable housing, affordable rental housing, and public rental housing." Some provinces and cities have already completed their 2024 annual target for collecting affordable rental housing, while a few regions have achieved their "14th Five-Year Plan" targets ahead of schedule. According to data disclosed by local housing and urban-rural development departments, several provinces and cities have already completed their 2024 annual targets for collecting affordable rental housing, such as Anhui, Jiangxi, Hangzhou, and Tangshan. As of December, Jiangsu Province, Jinan, and Tianjin have also successfully completed their 2024 affordable rental housing collection tasks. Jiangsu Province and Anhui Province have already completed their "14th Five-Year Plan" targets for collecting affordable rental housing ahead of schedule. This year, the "stock conversion" has become an important channel for collecting affordable rental housing, with many places encouraging the revitalization of existing resources through methods such as non-occupied rental conversions and storage conversions to increase the supply of affordable rental housing. With policy support, acquisitions of existing properties in Zhengzhou, Chongqing, Jinan, and Fuzhou have been gradually implemented to convert them into affordable rental housing, further improving the "market + guarantee" housing supply system. (2) Public Offering of Affordable Rental Housing REITs: Overall operation is stable and improving, and the issuance process of affordable rental housing REITs is accelerating. Project operation: The overall operation of the underlying asset projects of affordable rental housing REITs is generally stable, with a decrease in rental rates for projects in less desirable locations. According to the latest quarterly reports disclosed by various affordable rental housing REITs, in the third quarter of 2024, all twelve underlying leasing projects of five affordable rental housing REITs had a rental rate of over 90% (China Merchants Fund Shekou Rental Housing REIT has not yet published quarterly reports). Among them, the underlying asset projects of Huaxia Beijing Affordable Housing REIT, Red Soil Innovation Shenzhen Anju REIT, and Zhongjin Xiamen Anju REIT have significantly lower rental income than surrounding leasing projects, with average rental rates ranking in the top tier, generally at 95% or higher. The two projects of Zhongjin Xiamen Anju REIT have consistently maintained a state of almost full occupancy. Huaxia Fund Huarun Youchao REIT and Guotai Junan City Investment Kuanting Affordable Rental Housing REIT have adopted more market-oriented pricing for their underlying asset projects, with average rental rates ranking in the second tier, generally between 90% and 95%. Fund income: The overall operation of affordable rental housing REITs is stable and improving, with an increase in fund income and net profit compared to the same period last year in the first three quarters. The overall operation of public affordable rental housing REITs is stable and improving. According to disclosed data, in the first three quarters of 2024, Zhongjin Xiamen Anju REIT and Huaxia Fund Huarun Youchao REIT achieved a slight increase in income compared to the same period last year. Regarding net profit, except for Red Soil Innovation Shenzhen Anju REIT, which saw a slight decline in profit in the first three quarters, the rest of the affordable rental housing REITs saw an increase in profit compared to the same period last year, with Huaxia Fund Huarun Youchao REIT showing a particularly significant increase. In terms of the amount available for distribution, the overall amount available for distribution of affordable rental housing REITs in the first three quarters decreased by 7.8% compared to the same period last year. Except for Zhongjin Xiamen Anju REIT, which remained relatively stable compared to the same period last year, the other affordable rental housing REITs all experienced a decline, possibly influenced by a decrease in rental rates. REITs issuance: Affordable rental housing REITs proceeded with "initial offering + additional issuance" in parallel, with two REITs issuing and listing in 2024. In 2024, Guotai Junan City Investment Kuanting Affordable Rental Housing REIT and China Merchants Fund Shekou Rental Housing REIT were officially issued and listed in January and October, respectively, expanding the market for affordable rental housing REITs to six, with a total issuance scale of 9.55 billion yuan. In July 2024, the National Development and Reform Commission further lowered the threshold for issuing and expanding affordable rental housing REITs to promote normalization in the issuance of affordable rental housing REITs. Under the guidance of this policy and previous policies, China's affordable rental housing REITs have been moving forward in terms of "initial offering + additional issuance," and the market share of affordable rental housing REITs is expected to continue expanding in the short term. Regarding additional issuance, by now, all four affordable rental housing REITs listed in 2022 have proposed additional issuance plans. Among them, the first listed Huaxia Beijing Affordable Housing REIT has made the fastest progress in its additional issuance process, with the announcement of the launch of the additional issuance on May 23rd, planning to acquire four projects in Beijing including Langyue Jiayuan in Fangshan District, Guangjidian in Tongzhou District, Shengyue Jiayuan in Daxing District, and Wenquan Kaisheng Jiayuan in Haidian District; in September, Huaxia Beijing Affordable Housing REIT formally submitted the additional issuance application to the China Securities Regulatory Commission and Shanghai Stock Exchange and received acceptance in mid-month; feedback was given in November. The additional issuance work of Huaxia Fund Huarun Youchao REIT is also steadily progressing, issuing an announcement to start the additional issuance work in May and formally submitting the additional issuance application to the China Securities Regulatory Commission and Shanghai Stock Exchange in November, which has since been accepted. Furthermore, Red Soil Innovation Shenzhen Anju REIT and Zhongjin Xiamen Anju REIT issued additional issuance announcements in June and August, respectively. Overall, the four affordable rental housing REITs plan to expand their assets in the same city as their initial offering assets and are primarily located in first-tier cities. Regarding initial issuance, in 2024, many companies announced the start of their applications for affordable rental housing REITs and made actual progress. Guotai Junan City Investment Kuanting Affordable Rental Housing REIT and China Merchants Fund Shekou Rental Housing REIT were officially issued and listed on the Shanghai Stock Exchange and Shenzhen Stock Exchange in January and October 2024, respectively, becoming new members in the field of affordable rental housing REITs. At the same time, many other companies announced the progress of their applications for affordable rental housing REITs, such as Shanghai New Huangpu Industrial Group, Vanke Pokai, Xiong'an Group, Yuexiu Group, Hangzhou Anju Group, among others, with some REITs making substantial progress. Jianxin Jianrong Jiayuan Rental Housing REIT was given feedback from the Shanghai Stock Exchange on April 15th, and Huatian Zijin Suzhou Hengtai Rental Housing REIT also formally applied.Reported to the Shanghai Stock Exchange, the issuance pace of rental housing REITs has significantly accelerated.