The Evaluation Of The Asset-light Management Strategic Transformation In Real Estate Industry

As China’s national policy has been experiencing a series of changes,China’s real estate industry is also experiencing a lot of changes.With the rising cost of land and the shrinking of financing channels,the heavy-asset management model of real estate companies could not reach its past glory.Many real estate companies are trying to change the existing development dilemma through the strategic transformation to asset-light management strategy.Under this strategy,real estate companies are more likely to rely on providing value-added services to obtain benefits.Meanwhile,the companies can release some of their financial stress through a variety of financing channels to reduce the cost of financing,and improving the efficiency of the use of assets and management capabilities of the company,This paper uses case study method and the induction and deduction method,and taking Vanke Group as an example to analyze the way of its strategic transformation to asset-light management strategy using Economic Valued Added method.This paper firstly states the background and method of the research.On the basis of other researchers’ previous research,this paper makes a brief conclusion about asset management strategies.Asset management model can be divided into traditional asset-heavy management model and asset-light management model.The former emphasizes investing large amounts of capital in fixed assets,while the latter emphasizes the importance to investigate the resources in the company’s intangible assets,and integrates various internal and external resources of the company,thus creates unique competitive advantages and enhances corporate performance.Secondly,from the viewpoint of real estate industry,this paper analysis the features of both heavy and asset-light management strategy,and the real estate’s asset-light management strategy transformation.In the case study part,this paper selects Vanke Group as an example to access whether the transformation is successful through the comparison of before and after its transformation and its transforming method in 2014.After using the EVA model to evaluate the successfulness,this paper makes a conclusion that the profitability and the utilization of asset of Vanke Group has been further improved and the financial risks of the company have been reduced,thus the transformation is appropriate and helpful.Finally,this paper summarizes the Vanke group’s successful experience in the process of transformation,and gives some suggestions for those real estate companies who may also want to transform.