Recently, Eggshell Apartments has been involved in rights protection disputes among tenants, landlords and suppliers. On November 16, some media quoted the news of Eggshell’s resigned employees saying that Eggshell Apartments might declare bankruptcy, which caused a heated discussion on social media for a while. WeBank, which cooperated with Eggshell Apartment to “rent loan”, also appeared on the hot search.
On the evening of December 2, WeBank released a plan for repaying the rent of Eggshell Apartments on Weibo.
WeBank announces repayment plan for eggshell apartment rental loan: interest-free extension to the end of 2023
On the evening of December 2nd, Weizhong Bank released the Eggshell Apartment rent loan repayment plan on Weibo, stating that all customers of the bank affected by the Eggshell Apartment incident will be given the remaining loan principal after the customer’s request and the bank’s confirmation Interest-free extension. Before December 31, 2023, the bank will not deduct or accrue interest, and will not affect credit records.
As of December 1, among the bank’s 161,845 customers renting in Eggshell Apartments, 40077 were confirmed by WeBank after the customer’s request.
WeBank said that based on the current information from all parties, it is estimated that the disposal of problems related to the eggshell apartment incident may last a long time. If the eggshell apartment incident remains unresolved by December 31, 2023, the bank will announce a new customer rights protection plan as appropriate.
At the same time, the bank emphasized in the announcement that in accordance with the “Commercial Bank Law” and “General Rules on Loans” and other relevant laws and regulations, the bank as a commercial bank has no right to exempt loans.
Shanghai Housing Management Bureau interviewed Eggshell Apartments: Require companies to properly handle conflicts and disputes
Just the day before, in response to the situation where the landlord drove away the tenants and the rent of the room was difficult to return in the eggshell apartment, the Shanghai Housing Administration responded that it had interviewed companies and asked them to properly handle conflicts and disputes.
On December 1, the Shanghai Municipal Housing Administration responded to the petition on the Shanghai petition platform, stating that the headquarters of Eggshell Company is in Beijing, and the Beijing Municipal Government is taking the lead in coordinating the crisis resolution plan. In view of the difficulties in the operation of the eggshell company, the company is actively helping itself. At present, the problem of tight cash flow is more prominent. There are indeed problems such as delayed payment of funds and the inability of many services. It will take time for a full recovery.
The Shanghai Municipal Housing Management Bureau stated, “We have interviewed companies and asked them to properly handle conflicts and disputes. At the same time, we are also in communication with Eggshell Company every day and pay close attention to the company’s dynamics.” In addition, the reply indicated that it is about surrendering the lease. For subsequent loan credit issues, tenants can search for the public account “WeBank Rental Consumer Loan” on WeChat and follow the procedures to apply for “Credit Protection”. According to the principle of contract relativity, if the tenant has evidence that the tenant is still within the contract period and has paid rent to the long-term rental apartment enterprise, the landlord shall not interrupt, influence, or drive the tenant by cutting off water, electricity, or changing the door lock . In the case of being driven by the landlord, you should present the relevant contract and payment voucher to negotiate with the landlord whether you can take a step back and make a smooth transition. If the negotiation fails, you can seek help through legal channels such as reporting to the public security organs or applying to the street for mediation, or through legal channels to protect your legitimate rights and interests.
What happened to the long-term apartment?
This is not the first time a long-term rental apartment has experienced a thunderstorm.
Recently, following the bankruptcy and runaway of many parents’ apartment rental agencies, Eggshell Apartments, regarded as a “head enterprise”, broke out about defaulting on supplier accounts, landlord’s rent and tenants being cut off from water and electricity. The company was once known as the second largest long-term rental apartment in China.
The news that made the market a little relieved was that, almost at the same time as the eggshell thunderstorm, Ziruo announced the strategic acquisition of Beike Youth Boutique Apartments on November 30. After the merger is completed, Ziru will operate more than 50 centralized apartment projects in Beijing, Shanghai, Guangzhou, Shenzhen, Nanjing and other cities. In this regard, real estate analyst Yan Yuejin believes that such mergers and acquisitions have become a dawn in the cooling wave of long-term rental apartments this year, indicating that there are still outstanding companies in long-term rental apartments, and similar acquisitions also indicate that the pace of long-term rental apartment development is still not stagnating.
However, a single M&A event cannot completely calm the market sentiment, nor can it solve the problems of “renters” involved in rights protection and the development dilemma of long-term rental apartments. Most market analysts said that most long-term rental apartments in the current market have capital turnover problems, and in the long run, the lack of a sustainable profit model is the most fundamental problem.
“From 2015 to 2018, long-term rental apartments developed rapidly under the encouragement of policies and the support of capital, and now they have entered a period of consolidation. However, the industry once imitated the Internet model’s “only fast but not broken”, and there is nothing in the leasing business itself. Under the sturdy situation, we will hold high, hoping to solve the profit problem through fast listing. This is the problem of many long-term rental apartments.” Li Yujia, chief researcher of the Guangdong Housing Policy Research Center, told a reporter from the Financial Times.
And Zhang Dawei, chief analyst of Centaline Property, said in an interview with our reporter that most of the so-called long-term rental apartments in the market today are fake long-term rental apartments. The two main characteristics of real second landlords are earning rent differentials and embezzling funds. “Long income and short payment” is the biggest feature of this type of enterprise. He emphasized: “The long-term rental apartment we need is by no means such a second-landlord agency.”
Where is the long-term rental apartment?
With the continuous thunderstorms in institutions in the past two years, problems have already emerged. However, there is no clear solution yet. Where is the road for long-term apartment rental?
For the stock companies that have entered the market, it is very important to refrain from the impulse to expand blindly and maintain stable operations. In Li Yujia’s view, most of the apartments that have problems are Internet and entrepreneurial companies, eager for success. Since long-term rental apartments often require a large amount of capital investment in the early stage, once there is a blind impulse to develop quickly and expand the scale, it is easy to encounter a capital chain crisis. He said: “The brand expansion of long-term rental apartment construction promoted by traditional developers is slow, and it is still in the stage of model exploration. It is relatively stable. And companies like Ziru have been deeply involved in the housing leasing field for a long time and have a relatively thorough business understanding. A big advantage.”
The reporter found that the above-mentioned stable enterprises have made some voluntary contraction “structural adjustments” in 2020 when integrating data from multiple sources. Under the impact of the epidemic, changes in the market situation may be the main reason. However, this “shrinkage” does not mean business weakness. Taking Vanke Park Residence as an example, the 2020 mid-year report disclosed that although Park Residence’s urban expansion strategy has contracted in the first half of 2020, from 35 cities in mid-2019 to 33 cities, it has maintained a relatively high occupancy rate. However, in terms of the number of new houses and rental income, BoYu ranks high among the long-term rental companies in the real estate industry. Moreover, the monitoring data of Crane’s rental and sales show that in the first half of 2020, the occupancy rate of Vanke Park Residence’s projects more than 6 months in operation has climbed to 93.7%.
The call to strengthen supervision is also very strong. “Rental loans and other products must be banned,” Zhang Dawei said. The biggest problem with long-term rental apartments is not the increase in rents, but the “funding pool” brought about by financialization. The current long-term rental apartments are no longer a leasing company, but One “financial enterprise”. He pointed out that long-term apartment rental is a term arbitrage game with time as the core element: decoration and sub-leasing are actually just supplements to the capital pool, and products such as “rental loans” transfer the homeowners’ expected rent through platform projects. Under the name of the company, the actual controller can be used, which brings market risks.
In addition to the aforementioned risk prevention policies, it is more important to find a sustainable development path. “During the market cultivation period, without government funding subsidies or policy encouragement, this market is difficult to grow. With the economy stable and demand stable, the rent price increase in the past few years has obviously started to slow down, and some areas even have rent reduction This has a great impact on second-landlord-type rental apartments, because the rent price of the sub-leasing properties of the owner is locked, and under the expectation of stable rent in the future, it is very difficult to make profit.” Zhang Dawei said.
Li Yujia also agreed with this view. “Currently, the cost of acquiring housing is too high, and it is difficult to sustain the long-term rental apartment model of “earning the price difference”.” He said that in the future, housing can be reduced through the use of existing commercial office leasing and the promotion of collective land to build rental housing. Source cost. In addition, he added that the stability of the rental market also depends on the resolute implementation of the policy of “no speculation in housing”.
Reprint indicated source：Spark Global Limited information