GRA Market Weekly (2025-02-09)

Policy Watch

CSRC: supporting REITs issuance for AI, data centres and other new sectors

On 7 February, the China Securities Regulatory Commission released the Implementation Opinions on the Capital Market Delivering the "Five Priorities" of Finance. The document proposes supporting REITs issuance for projects in new infrastructure such as artificial intelligence, data centres and smart cities, as well as science and technology innovation parks, to help activate existing assets and support the digital upgrading of traditional infrastructure.

Chongqing removes ordinary homes bought by non-local residents from the property tax pilot

The General Office of the Chongqing Municipal Government recently issued a notice on policy measures to sustain the economic recovery, making clear that the city's pilot property tax on individual housing will be refined. On real estate, Chongqing will improve the citywide pilot policy and no longer levy property tax on ordinary homes purchased by buyers from outside the municipality; it will also expand and enhance the "whitelist" of projects under the urban real estate financing coordination mechanism, and support financial asset management companies in acquiring non-performing loans tied to distressed developers' projects.

Corporate Watch

New China Life and Vanke launch a RMB 1.6 bn rental housing equity investment partnership

On 7 February, New China Life Insurance, Vanke subsidiaries Xiamen Wanyi Yuanquan Investment and Hainan Wanju Yingtong Enterprise Management, and CITIC Goldstone Fund Management jointly committed RMB 1.6 bn to establish the Wanxin Goldstone Housing Rental Equity Investment Partnership (Limited Partnership). It marks New China Life's first major move into the rental housing sector.

Gaw Capital and Patience Capital Group complete the acquisition of a landmark Ginza shopping centre

On 7 February, Gaw Capital announced that, through funds under management and co-investment, it had teamed up with Patience Capital Group (PCG) to form a joint venture platform that successfully acquired Tokyu Plaza Ginza, an iconic retail asset in Ginza 5-chome, Tokyo. Gaw Capital holds 91% of the JV platform and PCG 9%. Completed in 2016, Tokyu Plaza Ginza occupies a prime site at the heart of Ginza with total GFA of 15,153 tsubo (c. 50,093 sqm).

Vanke pledges the Foshan Lingyue Business Center to Taikang Asset Management

On 7 February, China Vanke Co., Ltd. published an announcement on the progress of guarantees.

According to the announcement, Vanke's controlled subsidiary Foshan Shunde Wanbin Real Estate Co., Ltd. ("Shunde Wanbin") had earlier raised financing from Taikang Asset Management Co., Ltd. ("Taikang AM") through an insurance-funds debt investment plan and completed drawdown, with Vanke providing a joint and several liability guarantee for a term of three years from the maturity of all obligations.

The outstanding balance of the financing currently stands at RMB 750 m. Vanke continues to provide an unconditional, irrevocable joint and several guarantee covering full principal and interest, while controlled subsidiary Foshan Chancheng Wantou Yacheng Real Estate Co., Ltd. ("Wantou Yacheng") has pledged its 100% equity interest in Shunde Wanbin, with guaranteed principal of RMB 750 m in each case.

Shunde Wanbin has mortgaged the Vanke Lingyue Business Center project to Taikang AM as security for the financing.

Industry Highlights

State-owned executives take full charge of Vanke

On 5 February, Vanke circulated an internal document announcing a series of senior appointments; the incoming management all have Shenzhen state-capital backgrounds, with a notable share of Shenzhen Metro-affiliated personnel. Earlier, on 27 January, Vanke had announced that Yu Liang resigned as board chairman while remaining a director and executive vice president; Zhu Jiusheng resigned as director and president; and Zhu Xu resigned as board secretary. Xin Jie, Party secretary and chairman of Shenzhen Metro Group, became chairman of Vanke's board, presiding over the group's overall operations.

Nationwide new-home sales in the first month of 2025

In the first month of 2025, the property market continued to stabilise after its decline; supply and demand fell back seasonally, down month on month, yet thanks to last year's low base, transactions in the first 22 days of January were still up 26% year on year. Tier-1 cities stayed warm, with clear YoY growth: the four tier-1 cities fell 33% MoM but rose 56% YoY. Shenzhen, off a low base, surged 170% YoY, with momentum continuing in the near term; Guangzhou followed with YoY growth of around 60%. Beijing and Shanghai lost some momentum, each transacting no more than 400,000 sqm for the month, as the secondary market continued to siphon demand from new homes. Tier-2/3 cities fell about 30% MoM but rose 20% YoY, trailing tier-1. Cities can be grouped as follows: (1) previously hot cities such as Xi'an and Hefei rose both MoM and YoY, seeing a phase of higher volume; (2) Ningbo, Nanjing and Nanning declined MoM but posted YoY gains above 50%; (3) Tianjin, Jinan, Changsha, Suzhou, Fuzhou, Changchun, Wuxi and Huizhou continued to decline on both measures, mainly reflecting fatigue after earlier concentrated releases, with overall volumes still hovering at low levels.

Shanghai new- and secondary-home sales in the first month of 2025

From 1 to 23 January 2025, Shanghai new-home transactions totalled 464,000 sqm, averaging 20,000 sqm per day, up 39% from January last year. From 1 to 26 January 2025, secondary transactions totalled c. 18,279 units (including residential, retail, office and parking), up 30.58% YoY and down 24.36% MoM. Secondary residential transactions totalled c. 15,312 units, up 26.17% YoY and down 28.2% MoM. The citywide benchmark price stood at c. RMB 56,743/sqm, down 10.89% YoY and 0.3% MoM. After nearly four months of elevated volumes, the decline in Shanghai home prices continues to narrow and looks set to bottom out.

2025 Spring Festival travel consumption report released

On 4 February, Tongcheng Travel released its 2025 Spring Festival Travel Consumption Report. With 2025 marking the first Spring Festival since the holiday's UNESCO intangible-heritage listing, local folk customs and heritage culture became top travel draws. Returnees heading from tier-1/2 cities back to lower-tier hometowns lifted local hotel spending: bookings of mid-to-high-end hotels in some county towns rose more than 40% above ordinary levels during the holiday.

Domestic airfares rose markedly over the holiday, especially at the pre- and post-festival peaks, with average fares up more than 30% from December 2024. Routes between the Chengdu-Chongqing region and the Yangtze River Delta and Greater Bay Area were among the most popular, with strong bookings on Shenzhen-Chongqing, Chongqing-Shenzhen, Chengdu-Shenzhen and Beijing-Chengdu.

Chongqing, Chengdu, Beijing, Shanghai, Xi'an, Guangzhou, Shenzhen, Kunming, Hangzhou and Suzhou were the most-booked hotel cities. Destinations in Shanxi, boosted by the hit game Black Myth: Wukong, drew growing visitor numbers: Xinzhou, Datong and Jinzhong all entered the top ten for hotel booking growth, with Xinzhou up 82% YoY; Aba in Sichuan, Fangchenggang in Guangxi and Zhoushan in Zhejiang also ranked among the top five gainers.

Historical culture, natural scenery, zoos, museums and temples were the most-booked attraction themes, with historical-culture sites and museums up more than 50% YoY. The Longmen Grottoes in Luoyang, the Humble Administrator's Garden in Suzhou and Millennium City Park in Kaifeng were among the most popular heritage attractions.