On December 31, the Financial Associated Press reported (Reporter Li Jie) that KE Holdings consecutively acquired two land parcels in Peking and Hangzhou on the last day of 2024.

On December 31, the second day of the 8th batch land auction in Shanghai 2024, BAIHAOJIA, a subsidiary of KE Holdings, won the Fengxian New Town land parcel for 0.697 billion yuan. This parcel was the only residential land released for sale that day, with a starting price of 0.61215 billion yuan and a starting floor price of 20,000 yuan/square meter; the fill price for the parcel won by BAIHAOJIA was 22,781 yuan/square meter.

This is BAIHAOJIA's first appearance in Shanghai and also its first successful acquisition of a land parcel in a first-tier city. KE Holdings stated that the project is initially positioned for first-time homebuyers and can meet new demand, and it is BAIHAOJIA's second project independently managed.

On the same day, during the land auction held in Hangzhou, the consortium of Hangzhou Binjiang Real Estate Group, Xingyao Real Estate, and BAIHAOJIA acquired the Qiantang District Xiasha Unit QT0102-14 land parcel for 0.623 billion yuan, with a fill price of 16,370 yuan/square meter and a premium rate of 16.9%.

In contrast to KE Holdings independently managing the land in Shanghai, the Xiasha Unit land parcel will be jointly developed by Hangzhou Binjiang Real Estate Group, Xingyao Real Estate, and BAIHAOJIA through an equity cooperation model. "Hangzhou Binjiang Real Estate Group and Xingyao Real Estate are primarily responsible for the overall development and operation of the project, while BAIHAOJIA will use Big Data and AI algorithms to gain insights into customer needs, responsible for the product positioning plan," KE Holdings informed reporters.

It is noteworthy that BAIHAOJIA acquired two land parcels in core cities within one day, leading to discussions about whether KE Holdings is transitioning into a developer.

"KE Holdings does not aim to become a Real Estate Developer; in the long-term business model, we will not use our own funds to make large-scale heavy asset development investments," the management of KE Holdings stated at the third-quarter Earnings Conference this year.

It further stated that in the commercial arrangements of the entire Business, BEIHAOJIA does not aim to earn investment returns through large capital contributions but charges service fees by providing a complete set of solutions including product positioning, initial product design, in-depth design, and so on.

Xu Wangang, Vice Chairman of KE Holdings and CEO of BEIHAOJIA, stated that BEIHAOJIA hopes to further validate the implementation capability of C2M product solutions in different cities, targeting various demographic needs through its different projects, continuously enhancing partners' trust in BEIHAOJIA's C2M product solutions and the '1+2 model'.

According to KE Holdings, 'In 2025, BEIHAOJIA will focus on developing business in more than ten cities such as Peking, Shanghai, Guangzhou, Chengdu, Xi'an, Hangzhou, Nanjing, and Wuhan, continuously promoting a new model of Real Estate Development based on the C2M concept, where properties determine lands and lands determine properties.'

Public information shows that the BEIHAOJIA business line was established in 2023, and on July 12 of that year, KE Holdings upgraded its corporate strategy to 'One Body and Three Wings', forming four business lines: brokerage, home decoration, Hui Ju, and BEIHAOJIA.

Among them, the BEIHAOJIA Business is seen by the outside world as a sign of KE Holdings' entry into the Real Estate Development field. The company was registered in September 2023, primarily engaged in Real Estate Development Operation and Internet Plus-Related information services.

After the establishment of BEIHAOJIA, it recruited many talents from companies such as Longfor and Vanke to join the management team, and formed a diverse team composed of talents from the fields of AI algorithms, data products, customer research, design and construction, and marketing planning.

It is understood that after its establishment, BEIHAOJIA mainly focuses on project development opportunities in first- and second-tier cities, and since 2024, it has participated multiple times in land auctions in these cities.

KE Holdings achieved its first success in the land market during a land auction in Xi'an held on July 30 of this year, where two commercial and residential lands were sold in the Weiyang District of Xi'an, with a total Fill Price of about 0.134 billion yuan, both lands were acquired by a subsidiary of BEIHAOJIA.

Although KE Holdings secured its first land parcel in Xi'an, the Xi'an project is a multi-party collaboration. The land parcel acquired in Chengdu for 1.076 billion yuan on September 20 is actually the first project independently developed by KE Holdings.

"The reason for KE Holdings' entry into the Real Estate Development field may be related to the current sluggish property market and insufficient trading activity, which has impacted the company's performance. Leveraging rich channels and strong financial resources to enter the development sector is a direction and pathway for KE Holdings to rescue its performance and gain a competitive advantage," said an Analyst in the Real Estate Industry.

"We will not make blind bets. Our entry into any track requires a lot of preliminary thinking, pilot testing by small teams, and deep participation; we will not rush. This is also the logic we will follow while exploring KE Holdings' Business," said Peng Yongdong, co-founder, Director, and CEO of KE Holdings, at this year's third-quarter Earnings Conference.

Looking at KE Holdings' performance, in the third quarter of 2024, the total trading volume reached 736.8 billion yuan, a year-on-year increase of 12.5%. Among them, the total trading volume of existing housing was 477.8 billion yuan, an increase of 8.8% year-on-year; the total trading volume of new housing was 227.6 billion yuan, an increase of 18.4% year-on-year; the total trading volume of emerging businesses and Other was 27.3 billion yuan, an increase of 31.9% year-on-year.