The landlord’s rent is in arrears, the apartment is disconnected from the internet, the housekeeper cannot be found...
Eggshell apartments are trapped in a financial chain crisis
On November 25th, the weather was cold, but the headquarters of Eggshell Apartments in Dongcheng District, Beijing, was crowded with landlords and tenants, who were anxiously waiting in line for registration information.
Ms. Chen, the landlord present, told reporters: “I came here just to do a registration. I can’t receive the rent. I don’t know what to do.” The tenant Mr. Liu came to ask his “rental loan” how to apply for credit protection. The house is arguing with the landlord, but the loan has to be repaid every month." Mr. Liu was helpless.
Many eggshell apartments are now in arrears with the landlord's rent and other issues
Recently, many media reported that Eggshell Apartments was in a financial crisis. Many Eggshell Apartments had problems such as rent arrears from the landlord, the apartment was disconnected from the Internet, and the housekeeper could not be found. At the same time, its Hangzhou office removed the sign and the Chengdu office went to Building empty...
On November 16, the official Weibo of Eggshell Apartments stated that "we are not bankrupt and will not run away."
However, recently, the incident has continued to ferment. Due to the failure to collect the rent and no solution, some landlords broke the lock and evicts the tenant late at night. The tenant was forced to move and the rent loan had to be repaid. The tenant and the landlord who were the same victims had conflicts with the landlord. Continue to intensify...
Since August, many housing rental companies have exploded, and the crisis of Eggshell Apartments will undoubtedly bring even greater impact.
Established in 2015, Eggshell Apartments has 400,000 listings in just 5 years, and its business has expanded from Beijing to 13 cities across the country.
In January 2020, Eggshell landed on the New York Stock Exchange, becoming the second Chinese long-term apartment company listed in the United States.
Industry insiders have analyzed that high-priced housing and rent loans have played an important role in the rapid expansion of eggshells.
The landlord Mr. Zhang said that in 2018, an eggshell apartment salesman called and asked if his house was rented out.
"Later, I found out that almost all the owners in the same community received calls, indicating that they were still fiercely robbing houses." Mr. Zhang said that the monthly rent for eggshells was about 500 yuan higher than the market price. There were still people in the house. Take care of it and sign a five-year contract.
Rent loan means that the tenant signs a lease contract with the long-term rental apartment. The long-term rental apartment operator cooperates with financial institutions to guide the tenant to apply for the loan and prepay the rent and deposit for one year in one lump sum. The long-term rental apartment operator pays the landlord monthly or quarterly Rent, the tenant repays the loan every month.
The tenant Mr. Liu said that the choice of rent loans was due to the pressure of high rents in Beijing.
"I just went to work, and I was under a lot of pressure to pay three. If I choose a rental loan, I can pay monthly, and the loan interest is paid by eggshells, which is equivalent to an interest-free loan to me."
Quickly accumulate a huge pool of funds through rental loan leverage
The prospectus before Eggshell Apartments went public in the United States shows that in 2018 and the first nine months of 2019, the rent advances obtained through rent loans accounted for 88% and 80% of the company's rental income, respectively.
As for Qingke Apartment, the first long-term rental apartment company to go public in the United States, more than 60% of its rental income comes from rental loans.
Liu Lu, a professor at Southwestern University of Finance and Economics, said that non-self-contained long-term rental apartments are a capital-intensive and asset-light industry. Due to the different payment cycles of tenants and landlords, long-term rental apartment companies can quickly accumulate huge amounts of money through the leverage of rent loans. Capital pool to acquire more listings to expand the scale.
Liu Lu believes that this model is the same as the previous model of Internet companies using capital to "enclose the land", but its risk is greater. Once the rent drops and the house cannot be rented out on schedule, it will cause the rental loan model to fail to maintain. , And then the capital chain is broken.
"In recent years, capital has poured into the long-term rental apartment industry, but in fact the profit rate of this industry is very low." Liu Xiang, executive vice president of Chengdu Real Estate Brokers Association, said that normal business enterprises must basically achieve an occupancy rate of 90% to 93%. After the epidemic this year, most companies fail to meet this standard, and it is difficult to operate.
The eggshell apartment prospectus shows that in 2018, the eggshell apartment net loss reached 1.37 billion yuan; in the first nine months of 2019, the net loss reached 2.52 billion yuan.
The explanation for this eggshell is due to its continued rapid growth.
"Without scale, it is difficult for capital to invest in you. To scale is to collect more housing. Once the market fluctuates, it is easy to explode if you cannot make ends meet." An industry insider said.
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Important livelihood areas should prevent excessive financialization
Since 2018, long-term rental apartments have exploded due to problems such as rental loans and high leverage, triggering authorities in many places to stop "rental loans", but they have not disappeared.
In December 2019, the Ministry of Housing and Urban-Rural Development and other six ministries issued a document requiring that the proportion of rental loans in the rental income of housing leasing companies should not exceed 30%, and the excess should be adjusted before the end of 2022.
On September 7 this year, the Ministry of Housing and Urban-Rural Development's "Regulations on Housing Leasing (Draft for Solicitation of Comments)" made it clear that municipalities and municipalities with districts can establish a housing leasing fund supervision system to include rent and deposits under supervision.
Recently, many places have introduced supervision measures for special accounts for long-term rental apartments. Among them, Chengdu and Chongqing have made it clear that if a renter pays rent to a housing leasing company for a period of more than three months, the funds must be deposited in a supervisory account.
However, the person in charge of the relevant department in Chengdu admitted that the measure can only control companies whose headquarters and accounts are in the local area. To control larger national companies, the location of their headquarters and local linkages are required.
Liu Lu believes that long-term rental apartments are an important area of people's livelihood, and the damage caused by thunderstorms is great. Not only is it difficult for tenants to refund money, they also have no room to live, which can easily intensify conflicts.
"Important livelihood areas should return to the attributes of the service industry, prevent excessive financialization, and focus on guiding companies to reduce leverage." According to Xinhua News Agency
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Eggshell Apartment Chengdu office door is closed
The problem of the rupture of the capital chain of Eggshell Apartments continues to arouse social attention. The landlord of the Eggshell Apartment, the tenants who rent in the Eggshell Apartment, and even the properties of the office space of the Eggshell Apartment are facing a series of troubles.
At 9 o'clock on November 24, the reporter came to the eggshell apartment office in Xiongfei Center, Taisheng South Road, Chengdu. The door of the office was closed and an announcement was posted on the door, acknowledging that the company’s capital chain had encountered a problem, and attaching information for owners’ feedback QR code.
The front desk staff of the office building told reporters that after they received a call from Eggshell Apartments, they posted it in accordance with the request of the other party.
It was during the morning rush hour and many people entered the office building, but most of those who came to the 15th floor were landlords who came to defend their rights.
The so-called landlord is the individual landlord who entrusts his house to Eggshell Apartment for rent. Eggshell Apartment has signed an "asset entrusted management service" contract with them. Eggshell must pay rent to the landlord every month regardless of whether the house has a tenant or not. .
Many landlords present said that they had not received rent for more than a month.
A landlord told reporters that on November 23, the office was still accepting the registration of the owner's termination, but the door was locked when he came back on the 24th.
Immediately afterwards, the reporter rushed to the Eggshell Apartment Office and Production Office in Jiangxin Building, Taisheng North Road, Chengdu. This was previously the Eggshell Apartment Chengdu Training Center. Day closed.
A notice was posted on the gate of the training center, stating that it was changed to online reception because it was looking for relevant departments to solve a new reception venue. After the tenant scanned the QR code to register the information, Eggshell Apartments would reply by phone within one or two working days.
Although many people in the eggshell tenant group have notified everyone that the doors of the two office locations of Eggshell Apartments in Chengdu are closed, some people still come here for help.
In front of the Eggshell Training Center on the 17th floor of Jiangxin Building, a tenant said that she had already given the one-year rent to Eggshell. Last week, the landlord told her that she was limited to move out within 3 days.
In addition, some tenants on the site used the "rental loan" model of cooperation between Eggshell Apartment and WeBank to pay their rent on a monthly basis.
A tenant said that he applied for a loan because he saw that the monthly payment model of "rental loan" was more favorable.
"In fact, many people don't know that they have taken the loan when they use the rent loan, thinking that it is just'instalment'. Not every eggshell housekeeper will inform the risk in detail." He said.
West China Metropolis Daily-Cover News reporter Cai Shiqi Zhang Yuexi Lei Qiang