In this article, we will be taking a look at the 10 biggest real estate companies in China. To skip our detailed analysis of the Chinese real estate market, you can go directly to see the5 Biggest Real Estate Companies in China.
The Chinese real estate sector is one that has been driving the country's economic growth in recent years, in sharp contrast to the sector's previous status. In the past, private ownership of land and housing was at odds with the Chinese government's political values. However, with reforms led by Deng Xiaoping, the real estate sector has steadily managed to become one of the most important areas in the Chinese economy. By 2021, home ownership was beginning to be seen as a key indicator of wealth and status, opening up a large market for the real estate sector.
According to a Global X report published in September 2021, real estate accounted for 23% of household consumption in China as of 2019. The Chinese economy began to see the benefits of relying on a real estate sector in 2019 when the sales revenue from commercial real estate reached about $2.3 trillion. This amounted to about 10% of China's GDP at the time. The growth of the Chinese real estate sector is also aided by a number of factors. China's economy has been developing rapidly, with much of the country's rural population migrating to urban centers, thereby creating more demand for housing in the urban centers. Between 1980 and 2020, China's urban population increased from 19.4% to 63.9%, for instance. Additionally, there seems to be a glaring lack of alternative assets to invest in the country. Since the Chinese financial markets are still underdeveloped and capital controls hinder all efforts to make overseas investments, Chinese investors tend to focus more on real estate.
With this heavy reliance on the real estate sector, it's apparent that the default of Evergrande Group hit the Chinese economy hard. Evergrande Group is one of the largest Chinese real estate companies, and it defaulted in late 2021 during the country's ongoing property crisis. The default came about because Evergrande relied heavily on borrowing to fuel its growth, and through this approach, it had become China's biggest dollar-debt borrower. According to a Washington Post article published in December, Evergrande had planned to halve its $100 billion debt by mid-2023. However, the Chinese housing market began to slow because regulators began a crackdown on excessive borrowing. During this, Evergrande Group's stock and bonds tumble, and the company eventually went into default.
The fall of Evergrande Group was merely one high-profile case of the real estate sector's general collapse. With Beijing's crackdown on developers' high reliance on debt for growth, the entire real estate market, and all the companies within it, have been suffering. However, the Chinese government has been trying to resolve the crisis, having set up a financial stability fund through which it raised $9.6 billion in the first round of fundraising.
Despite the above, China still boasts a rapidly growing economy. As such, it is unsurprising that Chinese companies like Alibaba Group Holding Limited (NYSE:BABA), JD.Com, Inc. (NASDAQ:JD), Baidu, Inc. (NASDAQ:BIDU) are beginning to take a spotlight in the global market. Chinese real estate companies are no exception to this, despite the recent crisis. According to a Wall Street Journal article published this January, residential property sales in China were valued at $2.3 trillion in 2020 and $2.4 trillion in 2021. While the market has been hit hard, with residential property sales falling to $1.5 trillion, there is still hope for China's real estate sector in 2023. This is particularly due to the performance of state-owned property developing companies like China Overseas Land and Investment Limited and their potential to perform better than private real estate companies in light of buyers looking for more certain delivery for their apartments. Property sales in China are thus expected to head higher by the second half of 2023. As such, the Chinese real estate market is continuing to capture investor attention and funding heading into 2023.
Photo by Breno Assis on Unsplash
Let's now take a look at the 10 biggest real estate companies in China.
Our Methodology
For our list below, we have selected real estate companies based in China with the highest market caps. They are ranked from the lowest market cap to the highest market cap. We have mentioned sales revenues, profits, and other financial information for each of these companies and have discussed their core businesses below.
10. Guangzhou R&F Properties Co., Ltd.
Market Capitalization as of February 16: $970.8 million
Guangzhou R&F Properties Co., Ltd. is a Chinese real estate company engaged in the development and sale of residential and commercial properties in China, Malaysia, Cambodia, Korea, the UK, and Australia. The company is based in Guangzhou, China. It invests in and develops hotels, office buildings, shopping malls, logistics parks, and other retail properties.
The latest revenue report for Guangzhou R&F Properties Co., Ltd. shows that the company generated about $12 billion in revenue in 2021. The company also generated $5.3 billion in total sales revenue during the 11 months preceding December 2022. Guangzhou R&F Properties Co., Ltd. has over 32,000 employees.
Guangzhou R&F Properties Co., Ltd. is currently one of the largest-scale real estate companies in Guangzhou. The company's shares were listed on the Hong Kong Stock Exchange on 14 July 2005, and it is also the first mainland real estate company to join the Hang Seng China Enterprises Index. Some of the company's real estate developments are the Tianjin R&F Guangdong Tower, the Tianjin R&F Center, the R&F Princess Cove, and Vauxhall Square in London, UK.
Guangzhou R&F Properties Co., Ltd., like Alibaba Group Holding Limited (NYSE:BABA), JD.Com, Inc. (NASDAQ:JD), Baidu, Inc. (NASDAQ:BIDU), is among the largest Chinese companies on the market today.
9. Sino-Ocean Group Holding Limited
Market Capitalization as of February 16: $1.1 billion
Sino-Ocean Group Holding Limited is a real estate development company based in Beijing, China. It engages in property investment and development activities in China and helps develop residential properties. The company also invests in office premises, shopping malls, commercial complexes, and logistics projects. It was founded in 1993.
The company has about 14,000 employees and is part of Forbes' Global 2000 list as of 2022. Sino-Ocean Group Holding Limited had revenue of $10.3 billion in 2022 and assets valued at $44.1 billion as well. Profits for 2022 stood at $423.6 million. The company's services include equity investment, and it is also involved in the logistic property, real estate financing, pension, real estate fund, and environmental technology businesses.
This February, Sino-Ocean Group Holding Limited announced its plans to acquire Shandong Detian Jiaye Real Estate Co. Ltd. The acquisition is valued at $233.31 million. It has also proven to be more profitable than key competitors such as CC Land Holdings Limited. Sino-Ocean Group Holding Limited had a net income (TTM) of $92.6 billion as of this February, while CC Land Holdings Limited brought in $63.8 million in net income (TTM) as of February 16.
8. Agile Property
Market Capitalization as of February 16: $1.4 billion
Agile Property is a property development company based in Guangzhou, China. The company was first established as a furniture maker in 1985. It delved into the real estate business in 1992 and was listed on the Hong Kong Stock Exchange in 2005.
The company has now developed into a diversified conglomerate. Agile Property's business operations have been divided over time into six key business areas: property development, A-Living, Environment Protection, Education, Construction, and Hotel Operations. The A-Living Group works to provide comprehensive lifestyle solutions for homeowners and covers properties in over 27 cities and regions in China. Additionally, the Agile Environmental Protection Group provides environmental services such as solid waste treatment, among more.
Agile Property generated revenues of $38.7 billion by June 2022. It had a gross profit margin of 23.4% in June 2022. The company has over 98,000 employees.
7. China Merchants Property
Market Capitalization as of February 16: $2.5 billion
China Merchants Property was established in Shenzhen, China, in 1984 as a real estate company. It is the real estate flagship for China Merchants and offers residential properties in a range of cities. The cities include Shenzhen, Zhuhai, Zhangzhou, Foshan, Guangzhou, Shanghai, Suzhou, Nanjing, Beijing, Tianjin, and Chongqing.
In 2015, China Merchants Property was privatized. The company's parent organization, Shekou Industrial Zone Holdings, became a publicly listed company at that time.
China Merchants Property reported revenues of $136.9 billion in 2022. It has 240,000 employees, and it is a state-owned company directly supervised by the State-owned Assets Supervision Administration Committee. In 2021, the company's non-residential property management sales were valued at $731.7 million, while its residential property management sales stood at $639.1 million.
China Merchants Property, like Alibaba Group Holding Limited (NYSE:BABA), JD.Com, Inc. (NASDAQ:JD), Baidu, Inc. (NASDAQ:BIDU), is a Chinese company with huge profitability today.
6. Evergrande Group
Market Capitalization as of February 16: $2.8 billion
Evergrande Group is currently the second-largest property-developing company based in China based on sales. The company ranks 122nd on the Fortune Global 500. It is based in Shenzhen, China, and was founded in 1996 by Xu Jiayin. The company primarily provides apartments to upper and middle-income dwellers. It was formerly known as the Hengda Group.
The Evergrande Group became the most valuable real estate company in the world in 2018. It owns 565 million square meters of development land and real estate projects in 22 cities in Mainland China. One of its more prominent projects is the Ocean Flower Island in Hainan. Evergrande Group has developed itself into a highly diversified business since it was established. At present, its business areas include tourism and recreation, sports, automotive, health, entertainment, finance, and food and agriculture, apart from real estate.
The company reported annual revenue of $77.7 billion as of 2022, and it has over 160,000 employees. In 2022, Evergrande Group sold its Crystal City Project in Hangzhou for $531.9 million to Zheijang Zheijan Real Estate Group and Zheijang Construction Engineering Group. The proceeds from this sale are meant to help the company repay its construction debts of $133.8 million, and the deal is also expected to generate gains of about $31.4 million.
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Disclosure:None.10 Biggest Real Estate Companies in Chinais originally published on Insider Monkey.
As an expert in real estate and the Chinese economy, my extensive knowledge allows me to delve into the intricacies of the provided article. The information presented in the article outlines the current state of the Chinese real estate sector, highlighting its historical evolution, key players, and recent challenges.
The Chinese real estate market has undergone significant transformations, evolving from a sector at odds with the government's political values to a driving force behind the country's economic growth. The reforms initiated by Deng Xiaoping paved the way for the real estate sector to become a vital component of China's economy, accounting for 23% of household consumption as of 2019.
The growth of the Chinese real estate sector can be attributed to several factors, including rapid economic development, rural-to-urban migration, and a lack of alternative investment options due to underdeveloped financial markets and capital controls. The article underscores the importance of the real estate sector by stating that, in 2019, sales revenue from commercial real estate amounted to about $2.3 trillion, contributing to 10% of China's GDP.
However, the narrative takes a turn with the mention of Evergrande Group's default in late 2021, a notable event that had a substantial impact on the Chinese economy. Evergrande, one of the largest real estate companies in China, faced financial troubles due to its heavy reliance on borrowing for growth. The article suggests that Beijing's crackdown on excessive borrowing by developers led to a broader collapse in the real estate market.
Despite the challenges, the Chinese government has taken steps to address the crisis, including the establishment of a financial stability fund. The article anticipates a potential recovery in the real estate market, especially with the performance of state-owned property development companies like China Overseas Land and Investment Limited.
The subsequent section of the article shifts focus to the ten biggest real estate companies in China, presenting a methodology based on market capitalization to rank these companies. The detailed analysis covers key players such as Guangzhou R&F Properties Co., Ltd., Sino-Ocean Group Holding Limited, Agile Property, China Merchants Property, and Evergrande Group.
The inclusion of market capitalization, sales revenues, profits, and other financial information provides readers with a comprehensive overview of each company's standing in the market. Moreover, the article touches on recent developments and strategic moves made by these companies, such as acquisitions and diversification.
As an expert, I affirm that the provided information offers valuable insights into the dynamics of the Chinese real estate market, emphasizing the challenges and opportunities faced by the industry's key players.
