I welcome you to attend the China Vanke 2020 Interim Results release. Due to the outbreak of COVID-19, our meeting will be conducted in webinar and teleconferencing. All the audience can get access to the live streaming of Vanke official website, WeChat program, the Port Apartment app, and the WeChat mini program and trending.com. Right before the meeting starts, please allow me to introduce you our management team members being here with us today. They are Director, President, and CEO, Mr. Zhu Jiusheng. Director, Executive VP, and Chief Operation Officer, Mr. Wang Haiwu. Executive VP, Financial Principal, Madam Han Huihua. I'm the company secretary. My name is Zhu Xu. Today, we have two parts. For the first part, I will represent the company to report to you on the performance of the 2020 H1. In the second part, we are going to answer your questions.
Now, I shall start the presentation of our interim result of 2020. I'm going to cover four parts, including financial review, business overview, and the key priorities of 2020 H2. First of all, let's take a look at the results summary. You can see in H1 of this year, due to the COVID-19 reason and the complex environment, we are consolidating our capacity to safeguard the safety of our client. We also resumed the production work with the precondition of staff health. In the first year, our contract sales amounted for RMB 320.42 billion, down by 4%, which was 3.7% point lower than Q1, which is also lower than the commodity housing sales revenue reduction. Our revenue is RMB 146.35 billion, up by 5.1%. Net profit attributable to equity shareholders to the company was RMB 12.51 billion, up by 5.6%.
We have cash and cash equivalents of RMB 194.29 billion, up by 60.9%. Our net gear ratio is 27%, still very low. Our cash to interest-bearing liability due within one year is two. At the same time, our contract attracted for project sold but not yet booked is RMB 695.6 billion, up by 40.2%. In terms of the property service revenue, it's RMB 6.7 billion, and this is a consolidated result, up by 26.8%. While in terms of the rental housing, our occupation rate of the project with stable operation is 93.7%, up by 3.7%. In the Fortune Global 500, Vanke Group ranked 208 place, up by 46 places. Now, let's go to the page four. At the same time, our business gradually recovers under the pandemic. Our property development improved its capacity for individual projects. Five projects were shortlisted for China top 15 best sellers.
Our project today service has already been integrated from the simultaneous development of the residential and commercial residences, and the service coverage expanded to seven cities. Our long-term rental housing and current occupancy rate is 88%. The customer flow and recovery gradually recovered in retail property development and operation, and added in operation up by 11% in H1. Our occupancy rate at the high standard warehouse rose back to 89%. I would like to share with you some of the key financial indicators. Please go to page six. In H1 of this year, our group achieved a revenue of RMB 146.35 billion, up by 5.1% YOY. Net profit attributable to the average shareholder amounted for RMB 12.51 billion, up by 5.6% YOY. Basic earning per share amounted for RMB 1.11, up by 4% YOY. The return on equity, fully diluted is 7.4%. Now please go to the slide seven.
You can see the revenue of the property development and related asset operation amounted to RMB 138.14 billion, the revenue of the property service amounted to RMB 7.79 billion, which is different from the RMB 6.4 billion I mentioned. The RMB 6.4 billion is a consolidated number, for RMB 7.79 billion, it also includes the property service to our internal organizations. You can see that the property service business operation asset is around 40.4%. We have adequate cash, too. By the end of June, our total asset is around RMB 1,806 billion. Cash and cash equivalent is RMB 194 billion, which is higher than the number. Interest-bearing liability is RMB 272.98 billion, up by RMB 15.13 billion, our net gearing ratio is 27%, which is down by 6.9 pp, which is at the industrial low level. Please go to slide nine.
Now we see that our interest-bearing liability accounted for 1.5% of the total liability. We are still ranking as the leading credit rating in the industry. Financial costs maintained at a very low level in industry. Moody's, S&P Global, Fitch Ratings, and CCXI still provide us with Baa1, triple B plus, triple B plus, and the CCXI is also triple A. All the outlook for credit are all on stable tracks. Let's also talk about the interest-bearing liability and the financing activities. You can see our interest-bearing liability amounted to RMB 272.98 billion, represent 15.1% of the total asset. Especially, you can see we have around 55.8% from the bank loans, where for other loans it represent 80.7%. The fixed interest rate is around 36.9%, and floating interest rate is 63.1%.
For our interest-bearing liability, we have 64.5% of them over one year and 35.5% of them due within one year. At the same time, in terms of the financing, the company also reduced its financing rate. We successfully issued six tranches of the corporate bonds with a total number of RMB 7 billion at an average of 3.28%. We also completed the RMB 2.258 billion amounted for receivable ABS preferred debt at an average cost of 2.56%.
SCPG issued RMB 3.37 billion CMBS product with a coupon rate of 3.8%. VX Logistics Properties issued RMB 573.2 billion quasi-REITs product. Let's take a look at the business review. Please go to slide 11. First of all, I'd like to share with you the industrial trend. Due to the COVID-19, the sales of the real property product are on the downtrend. Since March, with the well-contained COVID-19, the market started to be recovered.
At the same time, we see that with the principle of a house for living, not for speculation. We started to stabilize the housing price, the land premium, and expectations. According to the National Bureau of Statistics of China, the sales area of commodity housing in China is around 694 million sq, down by 7.4%, and which is 17.9% point lower than Q1. Sales reached RMB 6.69 trillion, down by 5.4%, which is 19.3% point lower than the decline in Q1. At the same time, for the 40 cities under the company ongoing observation in H1, the area of commodity housing approved for pre-sale declined by 10.7% year-over-year, and the area of the commodity housing sold declined by 11.3% year-over-year.
At the same time, the sales cycle of the new housing available for sale at the very end of June this year, which means areas with a sales permit but not yet being sold in the above-mentioned cities, were about 10.4 months, representing a slight decrease from that of the end of 2019. Please go to page 12. You can see in H1 of this year, the total investment of property development up by 1.9%, which is 9.6% higher than Q1. New construction area declined by 7.6% YoY, which was 90.6% lower than Q1. Right after the COVID-19, all government started to increase the land supply. According to the China Index Academy, in H1, in 300 cities throughout China, the area of the land supplied to the residential development increased by 1% YoY, with area sold declined by 5.4% YoY and the average land premium rate is 60.5%.
We also have a very stable financial policies to continuity, consistency, and stability. According to the China Central Bank, at the end of Q2, the outstanding loan of the property development was RMB 11.97 trillion, up by 8.5%. Now let's take a look at Vanke's development. We still would like to be the key developers. You can see we have the development business as well as other major businesses. In terms of the property development and the property services, it's been divided into four BG. Yesterday, we just organized our central and western region BG, and including the southern region, Shanghai region, northern region, central and western region, and the property service BG. We also have other major business including logistics, SCPG, long-term residential housing, ski resort, overseas BU, education enterprises service, and food BU. Now please go to slide 14.
You can see for Q1, the sales of the property development reached RMB 320.48 billion, decline narrowed to 4%, especially from May on, our sales started to see an increase. From January to June, we realized contract sales area of 20.77 million sq m, representing 3.4% year-over-year decrease, which was 0.9% lower than Q1. Contract sales amounted to RMB 320.48 billion, representing 4% year-over-year decrease, which is 3.7 percentage point lower than Q1. The proportion of the sales amounted for each region is as follows. Southern Shanghai and Northern Central and other areas. Among the top 10 region, nine of them with sales more than RMB 10 billion. In Hangzhou, this number is more than RMB 20 billion. Let's go to the page 15.
You can see that in Q1 of this year, we do have some single property projects that are selling very well, and five projects were shortlisted in the national top 15 best sellers. On the right side, we show you the projects approved for pre-sale, amounted for RMB 800 million, with 80% of the project is sold on the day of launch. Nine of the project have 100% of the project sold on the launch day. You can see on slide 16, our subscription contract sales and the collection for the payment recovered month-over-month. Since May on, we started to see an increase compared with the same period of 2019. Let's go to page 17. Here is what we do with the segment. The booking value of the property, reached RMB 128.97 billion and up by 24%.
At the same time, you can see that the average booked price of the property development business was RMB 12,286 per sq m. The contract area, the operating profit margin is around 24.1%. The contract area sold but not yet booked was 47.43 billion sq m. The sold but not booked contract amounted for 695.33 billion, up by 10.6%- 40.2% representatively. Our product are for the living purposes. You can see residential amounted for 90.5% among the product sold. Commercial office property amounted for 6%, and other facilities accounted for 3.5%. Most of the products we sold focus with area below 144 sq m. Now let's go to page 18. Now let's talk about the project acquisition first half of this year. Actually, land market is quite competitive.
Vanke stick to rational investment and manage our risk and return. We did our best to explore all kinds of investments. We acquired 55 projects with a land premium rate of 12.4%. The total planned GFA amounted to 9.8 million sq m. Planned GFA attributable to the company is 5.05 million sq m. That means Vanke occupy about 51.5%. The total land premium is about RMB 32 billion. The average price is about RMB 6,336.8 million. If we look at by regions, from the highest region, they are the central and western region, the north region, southern region, and Shanghai region. If we look at the region by the land premium, highest is Shanghai, then southern, central and western, and northern region. Let's go to page 19. Here, we're talking about the resources we have.
By the end of the reporting period, the total GFA for the land bank is about 157 million sq m. Among that, the GFA projects under construction is 110 million sq m. GFA attributable to Vanke's equity holding is 65.95 million sq m. For that, under planning, GFA of the project 46.96 million sq m. Among that, attributable is 28.03 million sq m. If you look at by regions from the highest to lowest is central and western, northern Shanghai and southern. Let's go to page 20. We are going to talk about new constructions. With the impact with the COVID-19, the pace of new construction and construction completion has been slowed down. New construction floor area, 18.36 million sq m and accounting for 68.8% of our planned at beginning of this year.
Completed floor area amounted to 10.75 million sq m, up by accounting for 32.4% of the planned at the beginning of this year. We plan that the area of construction completed is going to be consistent with what we planned at beginning of this year. Next, let's talk about the other business. First of all, there are Vanke Property Services. Let's go to page 21. Vanke Service in 2020 H1, revenue included in the consolidated financial statement reached RMB 6.7 billion, up by 26.8% year-over-year . 55% of the revenue comes from projects non-Vanke. We extended different business types, including residential property, commercial and office property, et cetera.
By the end of the reporting period, Vanke Services had an aggregate contract area of 680 million sq m. We shaped the services with technology means. Let's go to 22. We're going to talk about commercial and office properties. We established a JV with Cushman & Wakefield, and we leveraged the advantage of both party to provide customers with the solutions for commercial real estate. From January to June, Vanke Services and Cushman & Wakefield JV had 97 newly added projects. Vanke Services regards to open public space as a mega property service projects and develops a new ecosystem. At the end of June 2020, our urban management service has been expanded to seven cities. We added such projects as Xiamen Gulangyu and the Town of Bulitren in Qingdao. Now let's talk about the Port Apartments, which is on page 23.
It's our long-term rental housing. By the end of the reporting period, we had 127,300 units in operation in 33 cities. Total number of units in operation is that, and the customers accumulated is more than 300,000. New units commenced is about 18,900, and the scale of the centralized apartments ranked the top one in the industry. We serve all kinds of customers, for example, like 2C, provide quality, safe, comfortable life in leased apartments for urban tenants. 2B, we provide one-stop housing solution for corporate employees. The 2G business, we actively participate in MOHURD's policy, support rental housing pilot schemes, establish JV with local governments and state-owned enterprises in Shenzhen, Shanghai, Chengdu. In page 24, we are going to talk about our contract sales with this long-term rental housing. We made breakthrough in securing corporate customers, and we started cooperation with renowned companies like Ping An, CMB, DJI, et cetera.
The number of corporate customers accounted for 10% of the total units in operation. For new projects, they are well-recognized by the markets. For example, we have Beijing Chengshousi Community, Beijing Gaoliying Project, Xi'an University City Projects. All the 235 units of the phase I of the Chengshousi Community projects were rented out seven days before the launch. We cover 18 cities. Let's go to page 25, talking about some of the retail property development operation. For the H1, the property business had a total operation area of 8.36 million sq m, Y on Y up by 11%. Revenue is RMB 3 billion, and the occupancy ratio for the overall leaseback is 90.6%. In the first half of this year, we offered help for our tenants. We offered rental relief for our tenants, and we established product center.
For example, like Songjiang In-City, Wenzhou In-City, we have the LEED certification. Also, we established, also promoted digitalization. Yinxiang Xin covered 50 cities in the SCPG nationwide, and active membership accounted for more than 15%, and online consumption accounted for 12%. We introduced traffic from offline to online. In April this year, we issued Yinxiang No. 2 CMBS. Total size is RMB 3.37 billion, with a coupon rate of 3.8%, which is the record low among the similar products. Let's go to page 26. They are the top 10 retail property projects with an average occupancy rate in H1. In the 25th of August, Yinxiang City was opened in Shanghai, Nanxiang, which is the biggest shopping mall in Shanghai, with an area of 340,000 sq m. Welcome to shop there. Let's go to page 27.
We are going to introduce about logistics and warehousing businesses. By the end of the reporting period, the revenue from high-standard warehousing is 570 million sq m, and the revenue from cold storage is 260 million sq m. The occupancy ratio as the projects are in mature stage is 81.5%. We have made deployment in 44 key cities. We cover customers more than 850. We ranked second, number first in terms of the scale of high-standard warehousing and cold storage scale. Our business is aimed to serve customers' daily life. For that, our customer covered e-commerce, express delivery, manufacturing, catering, retail, et cetera. We cover the renowned customers like SF, JD, Walmart, et cetera. In the 3rd of June, Vanke VX issued the first REIT product and it was successfully launched in Shenzhen Stock Exchange. Let's go to page 28.
We're going to talk about our education business, which performed well. In Shanghai, there is DTD Education, vertically integrated from kindergarten, primary school, middle school, and high school, and K12 education. Horizontally, it comprehensively cover IB, IGCSE, DP, A-level, and AP, the three major international mainstream curricula, providing students with truly comprehensive, diversified quality education. Vanke School in Shanghai Pudong New District was awarded in Asia's 2020 Asian School with Unique Characteristics. For Shenzhen Vanke Meisha Academy, we ranked the top 3 in Shenzhen, top 6 in Southern China, and 31st nationwide in Hurun Education Top International Schools in China 2020. In face with the pandemic, we established a cooperation with China Office of American College Testing, ACT, and Educational Testing Service, ETS, to provide ACT and TOEFL testing services for school students in campus.
In the school term of 2020, students received a total of 738 offers from institutes. Also, we use all kinds of technology method to push forward for this business development. For property development, in April 2020, Vanke Group joined hands with the Ministry of Housing and Urban-Rural Development to launch the first pilot scheme in the industry by applying AI technology in the examination of architectural joins as an entry point to launch AI technology. For logistics and warehousing services, through the fabrication of three information system platform of supply chain, food processing, sorting, assets management, we enhanced our ability to provide other value-added services. For rental housing, through application of digital tools such digitalizing for contract signing, online sales, tenants management, and retail store operation, we improved efficiency.
For retail property development operation, SCPG established an online membership system, developed a database of retailers and brands. Let's go to page 30. We have been trying our best to being a good corporate citizen. We embarked on targeted poverty alleviation rural revitalization. The company continued to push forward with Vanke targeted poverty alleviation and village revitalization special fund projects with China Charity Federation to support education poverty alleviation in five severe poverty-stricken cities in Guizhou, Gansu, Shaanxi, and Fujian, and Zhaotong in Yunnan. Vanke embarked on revitalization in Shanwei, Heyuan, Shaoguan in Guangdong. The company also provided support to Hechi and Baise in Guangxi, in minority regions in Guangdong. We were accredited Poverty Alleviation and Hardship Relief 10th Anniversary Outstanding Contribution Corporate Award by Guangdong Provincial People's Government, June 2020. For the last part, I'm going to introduce about our key priorities for 2020.
The operating environment of the second half of this year was still very complex. We will still persist with our focus on emphasizing products and services, intensifying organization restructuring, and consolidating, strengthening fundamental, perform the following tasks. First of all, persist with proactive sales, believe every day is a good day for property sale. Second, fully implement quality products, quality service, and quality projects. Consolidate, strengthen our fundamental to enhance competitiveness in industry. Third, intensify delicacy operation, enhance the effectiveness and efficiency of various business segment. Fourth, improve investment quality, maintain security and flexibility in financing to support long-term quality development. Fifth, continue to intensify organizational structuring, ensuring correspondence of person to related task. This is my introduction of our interim results. Now let's go to the second part, which is Q&A and interaction. Let's welcome the investors.
As we are waiting for the question from the online and teleconferencing channel, we see we have 220,000 audience online. Thank you very much for supporting our interim result release. We have 22 applicants for the QA. To make sure that we have everyone enough time for QA, only two questions allowed for each one to raise a question. Let's welcome Shuqing Qi from China Securities , to raise a question. Good morning, Mr. Qi. Can you hear me? Yes, please.
I come from China Securities Journal. I have a question to Mr. Zhu. We know that by last weekend, the government just launched the management principles for the key property enterprises cash monitoring and financing management. There are some news that the government actually drew down the triple red lines, including the net gearing ratio. Does the company know about this policy and whether this policy is going to impact our business operation? Thank you. Thank you. Thanks for the question. I'd like to repeat your question to see whether it is accurate or not. You mentioned the government announced the key property enterprises cash monitoring and financing management rules. Do we know it, and how it's going to impact our business, right? Yes. Mr. Zhu, please. Thank you very much, thanks for this journalist for your question.
Well, for the capital monitoring and financing management principles launched by the government, we do see this management principle from official China, well, from the self-media, it's been called as Triple Red Lines. I see that for regulators, they are launching such a key property development enterprises, capital monitoring, and financing management principles in order to mitigate the financial risks in the property market. We're going to study it and implement it, we are still very confident on our performance. We have a very prudent and very stable financial and capital status quo. Our net gearing ratio is 27%, which is very low in the market. Our cash and cash equivalent to interest-bearing liability due in one-year ratio is two times. Our interest-bearing liability only accounted for 15.1% of the total asset.
For the company, for the past consecutive 11 years, we have a positive operating cash flow. Even if with the COVID-19 and the changing market landscape, but for H1, our operational cash flow is still RMB 22.6 billion. I think we're going to have a refined management and capital monitoring policies from the government. We're going to update our countermeasures with the change of the regulation. In longer run, we are still confident on our performance. Thanks for this question from our journalist. Thank you very much. Thank you. I'm not sure whether we'd like to welcome the next question, please. Next. Land resources. I see in H1 of this year, the company have reduced payment for the land acquisition. What's the reason? Well, in July, it seems to acquire more land resources.
Is it means in H2, you're going to be more aggressive in acquiring the land resources? How you're going to comment on that, whether H2 is good time for the land acquisition? Thank you. Thanks. For Ken from Citibank. You were talking about the why land acquisition.
Okay, thank you. Mr. Zhu. Our investment strategy and investment philosophy. We're going to stick to our investment philosophy and principle for investment project. Currently, our land resources on our hands can support our next two to three years' development. We are still confident on that. At the same time, we're going to keep an eye on the changes of the market, including the changes of the client. We will be very sensitive to grasp good opportunities of investment in the market. Projects of good investment need to be observed for quite a while.
We will not be too conservative, but we won't also only be working on land acquisition. Thank you very much. Let's welcome the third question. Next, we'd like to welcome Hidong from Kaiyuan Securities to raise a question.
Thank you very much. Congratulations in achieving such a good performance for the interim result. I see one PowerPoint mentioned the company is working on development out of Vanke. What is advantage of Vanke on TOD land acquisition, and what would be the advantage of Vanke in acquiring the TOD projects? Thank you very much. Thanks for your question. I think your question is that you noticed Vanke is developing TOD projects. You want to know our advantage in developing TOD projects, right? Yes. Mr. Zhu, would you mind to answer the question? Yes. Thank you. Thanks for the question. Thanks for keeping an eye on our slides.
For the past few years, TOD has become a very important focus, carrying the same weight as urban renewal project in our company. TOD, according to its definition, T means transit or transportation. TOD is a kind of transit-based property development. In the past, developers take TOD as a value-added service, but now it's a must for each developer because for developers, we have to work on the urban development. Urban development always works with the traffic flow and the development of transportation and the transit. That's why since 2010 on, Vanke worked and invested a lot on TOD in order to further consolidate our capacity and also improve our operational efficiency. In 2010, we started to have one single station mounted TOD projects to multi-business format TOD. Now we have already made 49 TOD projects.
The total planned construction area is around 80 million sq m. We have already invested RMB 240.1 billion into the TOD projects that we acquired. Around 70%-80% of those TOD projects are for residential purposes. You can say that for the self-owned properties, around 66.6% of the area are for commercial and office purposes. Vanke made many years exploration, started to further understand each setting we are operating in. While at the same time, we also would like to leverage our structure advantage, especially after Shenzhen Metro being a shareholder of Vanke, we started to have a better understanding and a much more operational understanding over the TOD project. We now understand the underground transportation and how it's being operated, that can help to facilitate our TOD project development.
In April of this year, when working with the Shenzhen Metro Group of acquiring the Foshan Sky City project. From construction to project understanding to operation, we are working very closely on this project, where at the same time, you can see we also have a better capacity for the multi-segment operation from residential to rental housing to hotel to commercial and office area. We always make a balanced approach to make sure that all those can be combined into one TOD project. That's one of our advantage. Another advantage is that we also accumulated the TOD design and construction technology. We'd like to leverage the global resources so as to take care of the TOD projects in China. In the past, we probably need some improvement on TOD design, plan, construction and operation.
Now we have already leveraged the global resources and expertise in further consolidating our planning, designing, construction, and operation capacity over TOD projects. Fifth advantage is that we are now working with the metro companies, transit companies, local government for a very good cooperation with different models, including BOT, BT, and EPC. You can say that based upon the TOD cooperation model, the most easy one is EPC or BT or BOT. We are also working on the transit construction PPP project. Jointly speaking, we have six cooperation models with the local government TOD projects, where for Vanke, we mainly adopt the equity cooperation, the secondary development, and the tier one and the tier two collaboration model, which was greatly recognized and responded by the local government. Thank you very much.
Thanks.
Thank you. Next question, please. Next, I would like to welcome Wang Qian from Sina.com Finance to raise a question.
Thank you very much. I'm Wang Qian from Sina Finance. My question goes like this. Recently, Hangzhou, for house for living in not for speculation won't be changed. How Vanke is going to comment on the policy trend and industrial trend in H2, whether this kind of government monetary policies is going to impact the industry? Thank you. You were talking about the limited sales of the housing policies being tightened. How Vanke is going to comment on the market and whether those monetary policies going to impact the market. Okay. Thank you very much. Thanks for your question. I say that every time I will encounter this question, and it's an issue talked about in this industry quite a long time.
I say that the tune or for the long-term run, the policy won't change. Still house are for living, not for speculation. We also have the simultaneous development for rental as well as the commercial housing, residential housing, and the three stabilities, including stabilize the housing price and premier and expectations. These are the general tools and the framework for the property market. I believe, according to our observation, such a kind of tune won't be changed in the longer run. By having those policies as a combination, I think the government really want to stabilize the healthy development of the property market. As one player in this market, we need to catch up with the trend, adapt ourselves to those new policies, and also contribute to this market with our due work.
In longer run, we really want to be refined on what we're doing now as a player in this market. If we play our due role and do our due job, then I think the market will still be very healthy, and the monitoring policies are still going to hit its purpose. We'd like to do what we're supposed to do in this market. Thank you.
Thank you. Thank you. I also thank Ms. Wang for your question. Now let's welcome the next question. Now let's welcome Ms. Wang from CICC.
Good morning. I'm analyst Wang Hu from CICC. My question is about the market. We've seen that the first half of this year, the gross margin has been declined a little bit. Can you introduce about the reason, and also, can you give us outlook for the booking gross profit margin for the over year? What's the profit margin for sales and the resources so far not booked? You've noticed that the gross profit margin has going down for the revenue booking has been going down. You would like to know the trend for gross profit margin for the over year, and you want to know the profit margin for sales and also for the resources so far not booked.
Is that right?
Okay, let's give the floor to Ms. Han.
Thank you for your question. Yes. This year, the gross profit margin has been down by four percentage points compared with last year. In 2019, that was a high peak time for the gross profit margin because of most of the projects booked was done in 2017 and 2018, with high margin. This year, we've seen that the land premium has gone up, especially the proportion of land premium accounting in the overall prices, property housing. We estimate this year, they will still see a little bit of a slight decline for the booking gross profit margin. Vanke will stick to our, say, stable operation and reasonable management of resources. Thank you for your question. Okay. Now let's welcome the next question. Now let's welcome Ms. Lin Zhenhong from UBS. Thank you. I have a question.
We've seen that two businesses there have quite heavy assets and occupy a high percentage in ROE. Will that be broken down? You mentioned about the main business. Which business are you talking about? Logistics and the commercial property. Will these be split and get listed separately?
Okay. I want Mr. Wang to answer this question.
As you've mentioned, the commercial and logistics, especially logistics, they are actually becoming an important task in our exploration for us on our way to be a town and city developer. On this process, we hope that all those business can get listed, but at this stage, we do not have a clear plan for that. In this material of interim results, we have showed that we have logistics business results, that the high standard warehousing ranked No. 2 by scale, cold storage ranked number one in China. For commercial property business, I know we have performed very well. We commenced about projects occupies like 8 million sq m. For the first half of this year in May. At that time, the pandemic was still a big challenge for us, but the IN CITY in Taiyuan was opened as scheduled.
Several days ago in Shanghai, Jiaxing, there is an IN CITY. It's a very big shopping mall, was opened as well, very big one. For that IN CITY, there are a lot of highlights in terms of operation, in terms of architectural design. They achieved very good result in terms of revenue and foot traffic on the day of open. We welcome you to go there and see, to understand and have a look at our commercial businesses and the logistics business. Of course, we will try our best to disclose more on our reports to satisfy your requirement. Of course, we will make more efforts in the actual business development as well. Thank you. Now let's welcome the next question. Now let's welcome Duan from Xinjing Bao. Can you hear me? Yes. Please go ahead with the question. Yes. Ms. Zhang from Xinjing Bao.
I have a question for Mr. Zhu. First half this year, we've seen there's a very short recovery in the property market, but since the interim results, the overall sales growth rate has been declined for the overall real estate market. What's Vanke's view for the second half of this year? You noticed that there are a short window of boom for the property market, but when looking at the interim result of different listing property developers, they're still seeing decline of the growth rate of the sales. What's our view for the second half? Is that your question? No. Okay. I'll give the floor to Mr. Zhu. Thank you for your question. Yes. For our industry, the previous seven months was quite different. There is a down. Year-on-year sales was down by 2.1%. In May and June, there's a short realm of a boom.
We think that was a periodic boom of requirement that was released. Right now, growth rate was still negative. What you mentioned about, and what you care about is our view for the second half of this year. Actually, a lot of things we can't predict. The only thing we can do is to do our business well. Of course, we hope that we perform better and better, stronger and stronger. We have better results for the second half, better than the first half. Also we noticed that there are policy changes from a regulator's point of view. The main theme, the main tone won't be changed so much, though, for the overall market. Our observation is still that we think it's going to be consistent and maybe with a slight fluctuation. That's our observation. For your reference. Thank you.
Thank you for Mr. Zhu, and also thank you for your question. Now let's welcome the next question. Now let's welcome Mr. Tom from Haitong Securities.
Thank you. I'm analyst from Haitong Securities. I have two questions. First of is, so about your deployment among different industries. For example, Vanke have made investment in ICBC and Beike. What's your view on this strategic investment or deployment? Would that be a similar trend industry like to broaden the arena? The second question is, the investor already raised is that, we disclosed the revenue of several businesses, like for long-term rental housing and logistics for the first half is already, if we've analyzed that amount, it could amount to RMB 10 billion, more than RMB 10 billion. My question is that, among all the business that generates operating cash flow, what's your plan for the mid and long term?
In the future development, how much proportion this business is going to occupy, and what's your budget or what's your plan for those businesses? What's their future proportion for their future cash generating in the future? You raised question about that some of the peers have made a strategic investment in upstream and downstream companies. What's Vanke's view for those similar kind of actions? Would Vanke do same kind of thing? Second, you notice that we disclosed Some of the operating indicators for different businesses, including their revenues, and you wanted to know that in the future. For those businesses you mentioned, like long-term rental apartments, logistics in the future, what's their proportion? What's their contribution to Vanke's revenue? What's the plan for those businesses in three to five years? Is that question? Yeah. Thank you. I'll give the floor to Mr. Zhu.
I will then have Mr. Wang to answer your question. Maybe Ms. Han to add a few things.
Thank you for your question. Of course, the overall industry has seen many changes, no matters from the point of customer or from the market. We've noticed a lot of the peers made a strategic investment in upstream and downstream companies. In the future, I think this kind of deployment in ecosystem, we think is going to be a trend for the industry. You mentioned that we've been in this market for so many years. We've cooperated with many partners, like decoration company and financial company. We maintain very good relationship with them. We build our ecosystem already. Of course, we'll be sensitive for the market changes and market trends, new trends. Right now, for the investment in upstream, downstream, currently, we do not have clear plan for that, specific plan for that.
Let me add a few things. You raised that if we consolidate those business into our balance sheet, what's their contribution to the overall revenue? Right now, the revenue disclosed, some of them are on sheet, some of them off sheet, and for the long-term rent, actually part of the revenue, most of them on sheet. Commercial business, they are run by associate company. The revenue occupied like 2/3 of the overall revenue disclosed. For the future, if we consolidate into our balance sheet, we think we will consider other factors like the company's overall strategy, the scale of the business at that time, and our capability ourselves. I think we will control our pace of development while we are improving our capabilities. Thank you for your question. Now let's welcome the next question. Let's welcome Mr. Le Jiadong from Guangfa Securities. Thank you.
I'm Mr. Le Jiadong from Guangfa Securities. I have two questions. First of is about ROE, because, the overall industry, the ROE has been seeing downtrends. For Vanke specifically, in the future, the leverage and the turnover ratio, what's your countermeasures to mitigate the downtrend of the ROE? Second question is about property services business. For the urban development business, I would like to hear more introduction from that segment. Thank you.
Thank you for your question. You raised two question. One is ROE. The industry peers have seen declining ROE, so what's Vanke's countermeasure? Second, you mentioned one of the urban development business for Vanke's property services. You would like to know Vanke's plan, right?
About ROE, I would like to have Ms. Han to answer. About Vanke property service business, I would like to have Mr. Wang to answer your question. Thank you for your question. As you've already observed, the ROE for the industry have been overall declining. For Vanke, for interim result ROE, we've seen slight decline year-on-year comparison. Also, you mentioned the leverage ratio. We will stick to our strategy of prudential development operation to keep a healthy development strategy. A lot of things we do, a lot of the actions we took, for example, you mentioned that the granular development improve the efficiency of management was mentioned in the report. I think these are important things we need to do to support us for future development.
When the land premium is going up, when the margins is being further narrowed, these are the important things we need to do to keep our margin, to keep our efficiency and capability. For Vanke, what we'd like to do is the above several tasks to keep our ability to retain the profit. Thank you.
I'd like to mention about the property service and some of your concerns you mentioned. In terms of the troika or the three-pronged strategies, you can see Vanke Service started to provide the property service in our residential and other commercial office projects. We see it as a very important fundamental service we provide. From the end 2015 on, we started to expand our business coverage in the market. Until moment of today, and in the non-Vanke projects, our market share of the property service is almost the same as the property service we provided to the Vanke project. We made a lot of progress in the market and also win the recognition from other real estate developers. The second choice is our commercial and office building. Last year, we are working with Cushman & Wakefield for the JV.
You can see for this JV for this year, we started to work for the Center Dream and the High Tech Center of Chengdu for this JV to provide its services, so as to provide the property service and property management for those projects. This would also be a very important pathway we're going to take. The third choice is the urban property service we would like to provide. In H1 of this year, including H2 of 2019, we have already expanded the High Tech Center as well as the of Xiamen. These are all very important components of our urban property service. We started this model from Hengqin of Zhuhai City, and now this model is being popular in the market for both government and other companies.
We're going to further consolidate our development in this way to truly make sure our three performed strategies are working together to support our property service business in the near future. Okay. Thank you very much. Thanks for the question. If you need any further explanation, you can also approach us after this meeting. Well, for this year, we are going to organize our investors to have some on-site experience later. Now, let's welcome the next question. Next, let's welcome Huang Yu from Jiemian News to raise a question.
Thank you very much. My name is Huang Yu. I would like to talk about the Northwest BU. The Northwest BU, why should you establish it? In the near future, and what other cities are going to penetrate in Northwest part of China, and what's your development strategy? Can you hear me? Yes, we can.
What are the different tasks for the five regions? Are you still going to make a refined plan for the region layout? You also mentioned you're going to still try to further consolidate your structure. What is the reason for that? Thank you for this, friend. Your question is asking about why is established the Northwest BG. You want to know why should we establish that, and how many cities it's going to penetrating, and how the company is going to comment on the Northwest market. Your question, second part is talking about what's the difference of the tasks for our five BG. Your third question is that, what would be the timeline schedule for the separate listing? Not for separate listing. I know that for other BG region, do we still have the refined layout in the near future?
You mentioned about the structural restructure, you'd like to know what the mission of our group. Thank you very much. Let's welcome Mr. Wang to answer the question. Okay. Thank you. Yes, for sure. Yesterday, we just established our Northwest region BG. Why should we establish it? I think it's been here for a long period. In Northwest part of China, including five provinces in China, it covers around one-third of the total territory of China. In the past, we keep an eye on the issues in those region, that's why we made some explorations in the past. For example, for the past two years, we have already established the Northwest Region Sourcing Center under the Central and Western Region BU.
At that time, we started provide a service in Yinchuan, Xining, Ürümqi, as well as Lanzhou to form a willful alliance to make sure the business could be mutually supported for that four cities. That used to be the second tier under the Central and Western region BG. Why should we establish the Northwestern region BG? It's more like the second step to go. We really want to further consolidate our business in Northwestern part of China and to fully leverage the Northwest region as a key player in China's central and northern economy to truly leverage the Belt and Road Initiative, especially deep dive into those new cities. For our business expansion rhythm, that's why we established the Northwestern region BG, and we hope that it can also present us a good scorecard in the near future. After establishing the Northwestern BG, now we have five BGs together.
For each BG, the management area would be within a 3-hour speedy train as a diameter or 1.5-hour away travel diameter. That is the general coverage plan for the five BGs. We don't have any further plan to refine those BGs in the near future. You also mentioned about one group headquarter and the collaborations between different units. Besides the property development, we also have logistics and commercial, as well as other BUs that are working together for other major business. I say that we have already made the multi-segment expansion of our business. We hope that this BU can work together and to form a synergy for future collaboration.
That's why we have already adjusted more than 10 BUs in the past and framed them into three centers in order to serve the one quarter philosophy, where collaboration centers and the headquarters is going to be the coordinators between different BU. For example, our logistics BU and the housing BU, also the other BU. They can always work together to be more collaborative to serve one place. At the same time, we also made some explorations on BU and with our strategic background, we made such changes of the BU. We have three headquarters, one major quarter, one collaboration quarter, and one group headquarters. I believe by so doing, it will always work for our internal and external changes. It can also help to support our future business growth in the long run. Thank you very much. Thank you. Thanks for the question from the journalist.
Let's welcome the next question, please. Next, let's welcome Chen Tiancheng from Tianfeng Securities to raise a question.
All the management team members. My name is Chen Tiancheng from Tianfeng Securities. I have two questions for you. The first question, that is net gearing ratio. Your net gearing ratio is very low, even lower than 2019. On one side, I think it also shows a good financial performance, where on the other side, many investors are worried if you are too conservative on the net gearing ratio and your investment, and whether your financial decisions being truly worked on the future outlook, so that you have a very low net gearing ratio. How are you going to comment on that? The second question is regarding logistics BU. I'd like to say that for VX Logistics, how are you going to comment on its future growth?
How the company is going to comment on the turnover impact of the logistics in the near future? Okay. Thank you very much. Thanks for the question. You have two questions regarding the net gearing ratio. You find out our net gearing ratio is even lower than that of 2019. The investor may believe it's a good sign for robust financial performance, where some others also worried about we are too conservative. You asked us to comment on the outlook of this industry. Secondly, you asked about the growth of logistics, especially when Grammarly is being VX Logistics issued the REITs product, how it's going to impact the logistics business. Let's have Madame Wang to answer the first question and Mr. Wang for the second question. Okay. Thank you. Thanks for your question.
Regarding the net gearing ratio, internally in our financial management side, we always hope that net gearing ratio can be kept below 40%. For the interim result, this number is 27%, even lower than that of 2019. I think this is a very prudent financial policy we always uphold to. In H1 of this year, even with the outbreak of COVID-19, our operation cash flow is still RMB 22.6 billion, a very high number. Internally, this is also the principle we have. We need to have cash on our hands so as to survive in this market, especially with outbreak of COVID-19. I think a great learning we have from the market is that cash flow is the life bottom line of any company. If you have cash on your hands, it will make you more flexible in taking the opportunities from the market.
We're going to stick to this policy in the near future. We're not going to maximize our leverage for aggressive development. We are still going to be safe, be prudent for our future business development. Thank you. Thank you. You mentioned about the logistics business. Let me just give you a few words on that. At the current reporting period, we have around 6 million sq m for the logistics and 5 million for high-standard storage, 340,000 sq m for cold storage. We're still very positive on the cold chain, the cold storage, and the high-standard warehouse business and its future outlook. We also assigned Zhang Xu to be the responsible person of our logistics BU, which also shows how the company attaches great importance to the logistics business.
Everyone knows that right after the COVID-19 outbreak, people's life is somewhat more reliant on the safe product for food and the pharmaceutical side. We believe the cold chain and the logistics service would be a very important part of our urban life service. We hope that we can further our investment in logistics segment to be more sensitive, to take any opportunity from the market. I believe logistics service can also help to promote the synergetic development and the collaborative development of other BU at the same time. You also mentioned about VX Logistics and its quasi-REITs product. I think the impact would be positive. It's not only for our logistics business, the rental housing business, but also other relatively heavy asset business. It will be a new opportunity window for those businesses.
Why did I say that? Take logistics, for example. If the high-standard warehousing and cold storage warehouses are quality built and then rent rate was good, then the investors would be willing to hold them and help us to issue the REITs. It shifted from Vanke shareholder holding it, from the market institution holding it. To put it simply, if we do it well, then someone will be willing to pay for it. It's not even in our balance sheet. Of course, the management will be the VX management. We earn the management fee. We earned based on our operation and ability to operate it and manage it. We are not making money on money. It's good for our logistics, but also good for long-term rental housing business, for commercial property and other business. They're a good thing for them, will benefit all those businesses.
The second is, of course, the benefit is long-term rental housing, the REITs. Different regulators are researching related policies, and we are doing advanced, forward-looking research as well. I will add a few things for the VX. On the 3rd of June, we issued the REITs. This REITs is quite similar to publicly fund REITs, is pure equity, no fund. The cash flow all comes from the operation of the old warehouses. We did not provide any guarantee or pledge. We communicated with the regulator. We're trying to participate in the first phase of the REITs, and I think it's a very good thing for Vanke VX. Now let's invite next question. Let's welcome Ms. Yang Yi from Caijing. Can you hear me? Yes, very clearly. I have two questions.
First of all, Mr. Zhu mentioned that when you mention about financing management policies, I want to further ask about it. Vanke has attended the conference held, I heard. Can you tell us some of the more content of the meeting? Are Vanke already in the list for the three triple red line? For the financial indicators, do you think the acquisition was a good deal? What's the synergy? For Tahoe Group, Vanke, will you enhance your effort to acquire other non-performing assets?
Well, thank you for your question. You raised two questions. First, you mentioned that the financing management rule, you want to confirm whether we attended it. Can we tell you more about it? You mentioned about the acquisition with Tahoe. The logic of doing it, what's the synergy of doing it, and whether Vanke will enhance the efforts to acquire such non-performing assets.
Thank you for your question.
For your first question, I think you will get more information than me. I will focus on answering your second question. Did our acquisition of Tahoe
Why were we doing this? Why we have such a strategic memo? Actually, for Tahoe, they have challenges in terms of financing and cash flow for its products. It has good products and good technology, we know that Tahoe, it asked several institutions to discuss how to face the challenge. As we disclosed, we were in the game, we have conditions. The logic is that we are in the same industry, we are in the same membership, we are in the same association. Of course, I think for this company, it has good fundamentals, it has good basic condition, we should help them to find out the solution together when it's burdened with challenge. This is our consideration when we're doing this.
Maybe Vanke eventually will be the second biggest shareholder of Tahoe, then even that's true, then Vanke still will get in the operation under the guidance from its board. Maybe the board will require Vanke and other market institutions to help Tahoe. I think Tahoe has doing a good job in terms of its products portfolio. Whether it will be a successful one, it depends on three factors. First of all, it depends on Tahoe's mindset for survival. Second, it also depends on the understanding of other financial institutions. Of course, it's overburdened with liability, and if everyone asks us to pay back the principal and interest, then Tahoe will face breakdown of cash flow. I think we would either survive together or sink together on the boat. You can't get out individually, leave others on the boat sinking. That's not possible.
For other market and financial institution, I think we are trying to reach a consensus. Third factor is that it depends on the government regulator of Fujian, and also what the government attitude and response when the company under its governance faces challenges. We will participate the issued process. We will doing our best to solve the question, but the condition is that it will not impact the shareholder of Vanke, it won't impact the shareholders' equity holding, and it won't impact the shareholders' attitudes or sentiment. It won't impact the return of shareholders. That's my question. Thank you. Thank you. Thank you for your question. Let's invite next question. Let's welcome Li Qing from Nanfang Dushi Bao. I've noticed that for the long-term rental business, you have 2B, 2C, 2G business model.
2G, you mentioned, is that what you mentioned that for the apartments for talents? Is that what you mentioned in March? For the long-term rental housing that you started with, it's driven by 2B. What's the operation situation right now, and what is the revenue breakdown? Okay, thank you for your question. You mentioned about long-term rental housing business, you mentioned 2C, 2B, 2G business model, you wanted to know that if the 2G model is an application of strategy mentioned by Mr. Zhu. For example, we want to provide apartments for food delivery staff. Also, you wanted to know the proportion that the different business model contributes among the long-term rental housing business. Okay, I will give the floor to Zhu Xu to answer the question. For Vanke, the long-term rental housing, I've already mentioned in our slides, we've covered 33 cities.
We have 137,000 units in operation, and a lot more in construction. For the strategy of businesses, we have 2C, 2B, and 2G model. You mentioned about 2G. Government push ahead with renting and housing purchase in parallel. The government has been strengthening the rental requirements be met from the citizens. Of course, a lot of the developers in the institution have pushed ahead with the similar policies. For example, CCB, they're in collaboration with us to provide apartments for its talents and employees right now in Shenzhen, Beijing, and et cetera. We have started cooperation with governments and major banks. We signed an agreement with them, especially in Beijing, because in Beijing, there are collective land, and the government clearly mentioned that they're going to use collective land to build the talents house or apartments.
In future, about 100,000 units of this talent apartments will be built on collective land in Beijing, and you will see a lot of the similar projects. Governments will provide a lot of affordable housing for the young people in the city. This business has been just started, and a lot of things, a lot of units, are under construction or being constructed right now. In , we've started our apartments, which was built on collective land. In Jinlan, we built a JV with the local government, and we are doing this thing together with them. You mentioned about the scale. Actually, the scale, we are just starting it. We are in exploration stage. We hope that Vanke can make more contribution to the society in this regard.
Thank you.
Actually, okay. We will still have three more minutes. Let's invite the final two questions. Let's invite Liu Lu from Huatai Securities.
Thank you. I am analyst from Huatai Securities. My question is about a synergy of all business among Vanke. In the past, we have been centered around property development, and you mentioned the synergies. Can you introduce about it in more details? For example, together with commercial projects, and then how you can lower the land acquisition cost by doing it?
Okay, thank you. You mentioned about the synergy, and you want to hear more about it. Okay. Ms. Zhu will answer your question. Thank you for your question. Different BG and different BU of Vanke have a strong synergy between each other. Some of the synergy are quite human with some of the anti-human, which is a joke. For the Vanke, we persist with the strategy for the synergy. Of course, in this cooperation principle, capability goes ahead, and then we will develop synergy. While we're developing synergy, actually, the one who calls for synergy, they will be the one to pay for it, and also they're the one who benefit from it. For us, I think we all want to know more clearly why we like to have synergy.
Because it is beneficial, it is truly beneficial, for example, SCPG, it provides a lot of help with others. While SCPG has gained its leading position in its own arena, it also gains help, support from other segments. In the end, we have this situation that everyone's helping each other. There's a strong synergy among everyone. In a big group, we should not blindly focus in one or two singular BG or BU. Instead, we should have the whole picture in our mind always. Synergy is a mechanism, but also is an art. Take an example, whether a parent, whether you're good with running your family, it depends on a lot of things. You will have similar equation or algorithm as a criteria. We are still in a process of exploring it.
We hope that as investors, you can guide us, you can provide us with more advice. Okay. Thank you very much. Thanks for the friends from Huatai Securities. Now let's have the final question, please. Now, let's welcome Xie Ming from Times Finance to raise a question.
I come from Times Finance. My name is Ms. Xie. Can you hear me clearly?
Yes.
I have two questions. A few days ago, we see Beike has been listed. Its market value is even higher than that of Vanke. How are you going to comment on that? The second question is, do you have any kind of new activities for your food business?
I see that it's already become some of the new changes of the position. Would you mind to elaborate on the question?
The first question is Beike has been listed, its market cap is more than that of Vanke. How are we going to comment on that? Secondly, we want to know some updates of our food business.
Yes.
Thank you for Beike is being listed. About its performance after being listed, I think many people have their own observation. I think it's very natural for their market cap is more than that of other developers. I see that the value of the company is truly depends on what kind of social issues and problems they can help to handle with. Especially the source of their property, and I think that Beike did a very good job. They were being favored by the investors, and which is truly a very good model for us to learn from. In the past, we also made some investment into Beike. As the market cap of Beike is on the uptrend, and we also got some returns for such an investment. Second question is regarding the food business.
Now, Mr. Tan Huajie has become the chairman of our food business group. Huashen is our strong feeding business for agriculture development. Well, for Huashen and its internal operation, its management, and the quality of the team are still very good. We are still very positive on the food business and agriculture related product development. I think what we're doing over the food business is not seeking for the expansion of business scale. I think Mr. Tan and his team is working very hard in further consolidating their capacities to prepare for the long-term business growth. I think its return level won't help to burden our return level of the whole company. Thank you very much. Thank you. Thanks for the answer and thanks for the friend online.
I know there are more questions online, but as time is quite limited, we have to conclude our webinar. If you have any further questions, please send your question to ir@vanke.com, our IR mailbox. Here is the end of the interim result release of 2020. Thank you very much. See you next time.