Author | Zhou Zhiyu

On the last day of 2024, a "new entrant" joined the land auction market in Shanghai.

On December 31, the bidding for the 8th batch of land auctions in Shanghai concluded on the second day. In front of veteran players like Poly Real Estate, Xiangyu, and TIAN AN consortium, KE Holdings’ subsidiary Beihome successfully acquired the only residential land available for sale that day. The final fill price was 0.697 billion yuan with a premium rate of 13.9%, translating to a floor price of 22,781 yuan per square meter.

This is Beihome's first successful land acquisition in a first-tier city. In today's land auction market where even leading state-owned enterprises are cautiously acquiring land, Beihome's move has attracted attention from the industry.

According to Wall Street Insights, the Fengxian project has a plot ratio of 2.0, initially positioned for rigid demand and upgrade properties, and will be fully managed by Beihome.

From a geographical perspective, the Fengxian project is located in the core area of Fengxian New City with mature supporting facilities. Although the nearby Longhu Guancui is aimed at rigid demand, it has sold out in three releases.

People close to the project indicated that the overall scale of the Fengxian project is not large, but the location is relatively mature. Beihome hopes to create a model through self-management of this project, allowing the outside world to better understand Beihome's C2M (Customer to Manufacturer) concept.

Xu Wangang, CEO of KE Holdings, expressed the hope that through the successful management of this project, the implementation capability of C2M product solutions in different cities and for different demographics will be further verified, continuously enhancing partners' trust in the '1+2 Business model'.

The so-called '1+2 Business model' consists of '1', which is based on the C2M concept, tapping into user needs to form precise product positioning and product design plans; '2' refers to the financial support services and integrated online and offline Marketing Services that KE Holdings can provide.

In order to further implement the C2M concept, by the end of 2024, KE Holdings will also launch the 'Build a Good Home Together' online Community. Users can log into the KE Holdings APP to access the 'Build a Good Home Together' page to browse and evaluate the two product design plans that were simultaneously launched for the Fengxian project.

Next, the 'Build a Good Home Together' online Community will also be opened to the entire Industry and the public, covering more cities and more sites. The relevant sites will present various product design plans provided by third-party design agencies on the 'Build a Good Home Together' platform, allowing users to directly participate in the evaluation and co-building of design plans.

Prior to the Fengxian project, KE Holdings had obtained the H12 land parcel in Chengdu in September this year and announced self-management. However, KE Holdings emphasized that through project management, the aim is to verify the implementation capability of its C2M product solutions and to share this capability with developers, owners, and construction partners in the Industry, creating a data-driven residential development service platform to build a new model of Real Estate Development with C2M.

The implication is that KE Holdings does not intend to become a Real Estate developer or earn investment returns through a large proportion of funding. Instead, it aims to reshape the traditional development process, focusing on user needs to develop capabilities in development and design, as well as in financial services and Marketing Services.

Currently, KE Holdings' '1+2 model' has been implemented in cities like Xi'an, Peking, and Hangzhou. Among them, the Changan Huaxi Mansion project in Peking sold out all units upon opening, achieving sales of 1.6 billion yuan.

Li Yujia, chief researcher at the Guangdong Provincial Housing Policy Research Center, believes that 2024 will be the year of the most intense competition among developers, with most facing difficulties in selling houses. As KE Holdings possesses terminal demand micro Big Data and understands demand characteristics and changes, this presents the best opportunity for its transformation.

In 2023, KE Holdings officially announced a strategic adjustment to "one body and three wings"; BEIHAO HOME is the residential development service platform under KE Holdings. KE Holdings hopes to leverage the BEIHAO HOME platform to integrate industrial capital and Internet Plus-Related thinking to promote rapid transformation in the Real Estate Industry.

After the Fengxian project, KE Holdings also hopes to undertake a series of attempts in multiple cities to encourage more developers, property owners, and construction agents to adopt the BEIHAO HOME "1+2 model."

According to Wall Street Insights, in 2025, BEIHAO HOME will focus on conducting Business in more than ten cities including Peking, Shanghai, Guangzhou, Chengdu, Xi'an, Hangzhou, Nanjing, and Wuhan.

This means that next year in the land auction market, we will see KE Holdings' presence more frequently. Whether this series of attempts can explore more possibilities for the development of the Real Estate market depends on whether KE Holdings can continue to create convincing examples.