GRA Market Weekly (2025-02-23)

Policy Watch

Xi Jinping: broad prospects for the private economy - now is the time for private enterprises and entrepreneurs to show their strengths

General Secretary, President and CMC Chairman Xi Jinping attended a symposium with private enterprises in Beijing on the morning of the 17th and delivered an important speech. He stressed that the Party's and the state's fundamental policies on private economic development have been incorporated into the socialist system with Chinese characteristics and will be consistently upheld and implemented - they cannot and will not change. On the new journey of the new era, the private economy enjoys broad prospects, and now is the time for private enterprises and entrepreneurs to display their capabilities. He called for unified thinking and firm confidence to promote the healthy, high-quality development of the private economy, and expressed the hope that private enterprises and entrepreneurs would serve the country, focus on development, operate lawfully and well, and let those who prosper first promote common prosperity, making new and greater contributions to Chinese modernisation.

MOHURD: expanding the construction and supply of for-sale affordable housing

On 18 February, MOHURD held an on-site work conference in Qingdao, Shandong, on building waiting-list registries for for-sale affordable housing, attended and addressed by Party group member and Vice Minister Dong Jianguo. The meeting called for accelerating registry construction and expanding the construction and supply of for-sale affordable housing, giving full play to its important role in improving livelihoods, promoting transformation and stabilising the economy. Local governments were urged to take active ownership and deliver concrete results.

NFRA: maintaining stable and effective incremental credit supply to private enterprises

On 18 February, the NFRA Party committee convened to study General Secretary Xi Jinping's speech at the private enterprise symposium and deploy implementation measures. The meeting called for making good use of the "whitelist" mechanism and deploying a full "combination" of real estate financing tools to meet the reasonable financing needs of all types of developers - including private ones - across different stages and links of their business.

Guangdong fires the "first shot" in restarting land reserve buybacks

Since February, multiple cities across Guangdong have issued a dense stream of notices on proposed buybacks of idle land, covering 15 cities, 161 plots, 6.844 m sqm of land and RMB 35.37 bn in buyback value - a scale and pace exceeding market expectations. Huizhou leads by buyback funding (RMB 12.7 bn), followed by Zhuhai (RMB 6.6 bn). This is the first large-scale disclosure of land reserve buybacks by local governments.

Beijing: first batch of land-reserve special bonds exceeds RMB 10 bn

On 18 February, Beijing issued a batch of local government bonds comprising RMB 10.1 bn of general bonds and RMB 46.29 bn of special bonds, all new issuance. Proceeds of the RMB 46.29 bn of new special bonds will mainly fund shantytown redevelopment, urban village redevelopment, land reserves, park infrastructure, environmental remediation and new infrastructure. With this, on 18 February Beijing fired the first shot in restarting land-reserve special bond issuance.

Market Watch

Shanghai's opening land auction runs hot as private and foreign capital swoop in

On 20 February, Shanghai's first land sale after the New Year concluded with all four plots sold at premiums, raising a combined RMB 15.926 bn. The Ruihong plot in Hongkou went to a China Jinmao-Kheng Leong consortium after 184 rounds of bidding for RMB 8.96435 bn, a 38.2% premium and a floor price of RMB 117,000/sqm (c. RMB 125,000/sqm on saleable area), setting a new total-price record since Shanghai adopted its "dual-high, dual-bidding" rules. The Pudong Xinyangsi plot cleared at a 33.38% premium, Songjiang New City at 13.98%, and Fengxian Nanqiao at 16.54%.

Notably, beyond central SOEs such as China Resources, Poly, China Overseas, China Merchants, Jinmao, Yuexiu, Xiangyu, C&D and ITG, participants included mixed-ownership developer Greentown, private developers Longfor and Gemdale, and long-absent Singaporean investors Kheng Leong and Frasers - all of whom came away with plots.

Hangzhou: high premiums return as the Chengdong New City floor-price record falls again

On 20 February, Hangzhou sold three residential plots for a combined RMB 3.14 bn. Binjiang Real Estate took Plot 2 in Binjiang District at a floor price of RMB 42,989/sqm and a 43.69% premium - the plot lies only c. 300 metres from Fengda Creative Park, home of Unitree Robotics, one of Hangzhou's "six little dragons". Dajia Real Estate took Plot 4 in Shangcheng District at RMB 47,486/sqm and a 54.04% premium, resetting the sub-market's residential floor-price record and ranking among Hangzhou's top four residential floor prices.

Suzhou: Greentown wins the Aoti South plot at a 21.61% premium

On 19 February, a residential plot in the Aoti South area of Suzhou Industrial Park was sold. The first plot listed in 2025, it drew 124 bids (listing-period plus timed bidding) before going to Greentown for a total of RMB 1.42948 bn, at a floor price of RMB 26,754/sqm and a 21.61% premium.

Project Watch

Shanghai: Zhoupu Wanxin hotel-apartment project sells at judicial auction

On 13 February, the Zhoupu Wanxin hotel-apartment project in Pudong New Area finally sold after an auction process spanning more than five years, at RMB 105 m - over 40% below its original appraised value. Located in Zhoupu Town, Pudong, the project is a 700-metre walk from Zhoupu Wanda Plaza and five minutes from the metro. Total GFA is 11,000 sqm across a hotel component of 160 rooms and an apartment component of 140 rooms.

Anhui's first smart affordable rental housing project, Chengyu Tonghuali, opens

Chengyu Tonghuali, a flagship long-term rental community built by Hefei Anju Group, opened on 18 February, comprising three residential blocks and one commercial block with 606 rental units. It is Anhui Province's first smart affordable rental housing project and one of seven smart-residence demonstration projects designated by the Hefei Housing Security and Real Estate Administration Bureau.

Guangzhou: CSCEC Gaoxin Caiyu opens in Tianhe Smart City

CSCEC Gaoxin Caiyu (Smart City store) formally opened on 18 February. Jointly developed by China Construction Fourth Engineering Bureau's urban development arm and Guangzhou Hi-Tech Group, the project sits beside the Greater Bay Area innovation and entrepreneurship incubation base in Tianhe Smart City, adjacent to the 47-hectare Tianhe Wetland Park, with convenient transport and full amenities. It provides 431 affordable rental units in refined studio and one-bedroom layouts of c. 35-64 sqm, fully furnished and equipped for move-in-ready living; pre-opening reservations exceeded 50% occupancy.

Corporate Watch

China Life to commit RMB 3.5 bn to a partnership investing in REITs

China Life announced on 17 February that it, Beijing Shoujing Investment and Caixin Life intend to enter into a partnership agreement with China Life Real Estate Investment Management, Beijing Langjia Private Fund Management and Chuangchi Enterprise Management Partnership (Limited Partnership) to establish the Beijing Pingzhun Infrastructure Real Estate Investment Fund Partnership (Limited Partnership), with total committed capital of RMB 5.237 bn from all partners - including RMB 3.5 bn from China Life and RMB 700 m from Caixin Life.

China Life said the transaction leverages national strategy to invest in infrastructure public REITs alongside strong partners, sharing returns through the partnership structure.

PAG completes fundraising for a USD 4 bn real estate fund

PAG recently announced the final close of SCREP VIII, the tenth fund in the flagship opportunistic real estate series under PAG Real Assets, at USD 4 bn, focused on real estate and debt in developed Asia-Pacific markets. Per Preqin, it is the largest pan-Asia-Pacific USD real estate fund raised in the past 12 months. Targeting developed Asian markets, the fund plans to invest across data centres, logistics, offices, multifamily and distressed assets. Its strategy centres on delivering long-term value through investments in physical real estate and distressed debt, with capacity for development, high-yield bridge financing and equity investment platforms.

China Universal's Shanghai Land rental housing REIT clears the exchange

Shanghai Stock Exchange REITs project updates show the China Universal Shanghai Land Rental Housing closed-end infrastructure fund's status changed to "approved". The originator is Shanghai Land Housing Rental Co., Ltd., with China Universal Asset Management as fund manager. The underlying assets comprise two projects - Hongqiao Jingzhi Community and Chengfang Community (Jiangyue Road) - with a combined valuation of RMB 1.351 bn and an appraised unit value of RMB 15,303.89/sqm.

CPIC AM-VNET IDC holding-type real estate ABS accepted by the SSE

On 21 February, the CPIC AM-VNET data centre holding-type real estate asset-backed plan was accepted by the Shanghai Stock Exchange. Per the SSE bond project platform, the originator is Beijing VNET Broadband Data Center Co., Ltd. and the plan manager is Pacific Asset Management. The instrument is a holding-type real estate ABS with a proposed issuance size of RMB 860 m.

Gaw Capital files a holding-type real estate ABS

Per the SSE, the Guojin Asset Management-Gaw Capital holding-type real estate asset-backed plan has been formally filed and accepted, with Gemus (Hong Kong) Limited as originator, Guojin Securities Asset Management as plan manager, and a proposed issuance of RMB 867 m.

Gaw Capital is a private equity fund manager focused on Asia-Pacific real estate and other high-barrier markets globally. As of Q3 2024 it had raised USD 22.9 bn in equity, with assets under management exceeding USD 35.8 bn, spanning residential development, offices, malls, serviced apartments, hotels, logistics and internet data centres (IDC).

Ziroom and Invesco establish asset management platform "Xingyao Rujing", with the first project in Beijing

Ziroom, China's largest rental housing operator, has entered a strategic partnership with Invesco Real Estate to form a joint venture - Xingyao Rujing - as the two parties' sole platform for holding-type rental housing asset management in China. Through new-build investment and acquisitions of existing assets, the platform will develop both affordable and market-rate rental housing, delivering high-quality rental communities while exploring innovative models in real estate investment and securitisation, attracting long-term domestic and international capital to support the high-quality growth of China's rental market.

The platform's first project will land in Shijingshan, Beijing, with c. 1,500 planned units, to be subsequently enrolled in the affordable rental housing system.

Vanke set to repay its third public bond of the year on schedule

On 18 February, NAFMII's website disclosed that Vanke will pay the "22 Vanke MTN003" bond maturing on 25 February as scheduled. Issued on 28 February 2022 at RMB 2 bn with a 3.0% coupon and three-year tenor, it follows the on-time full repayment of principal and interest on "22 Vanke MTN001" (matured 27 January) and "22 Vanke MTN002" (matured 16 February).

Vanke and partner institutions launch a RMB 1.6 bn rental housing fund

On 18 February, Vanke announced a new Pre-REIT fund with CITIC Goldstone, New China Life and Dajia Insurance, expected to provide positive cash flow and profit. Total commitments are RMB 1.6 bn: New China Life 59.94%, Dajia Insurance 30%, CITIC Goldstone 0.06% and Vanke 10%. Proceeds are earmarked for acquiring 100% of Xiamen Jiade Hongshi Properties, a Vanke subsidiary holding the Xiamen Port Apartment Yuan'er Bay Community asset along with development loans and other liabilities. The community, on Xiamen Island, plans 7,724 affordable rental units in total - the largest affordable rental housing project in Fujian.

Vanke: Shenzhen Metro to provide a RMB 4.2 bn loan

On the evening of 21 February, Vanke announced that its largest shareholder, Shenzhen Metro Group, intends to provide a RMB 4.2 bn loan to repay principal and interest on Vanke's publicly issued bonds, with a 36-month term. Pricing is benchmarked to the 1-year LPR published by the National Interbank Funding Center on the business day before each drawdown, minus 76 bps - currently 2.34%.

IHG acquires the Ruby brand to drive global expansion

InterContinental Hotels Group recently announced the acquisition of the Ruby hotel brand from Ruby SARL for an initial consideration of EUR 110.5 m. The strategic acquisition significantly expands IHG's European footprint and adds a new member to its brand portfolio - bringing IHG to 20 hotel brands. IHG aims to use Ruby to expand in the fast-growing urban micro segment, targeting more than 120 Ruby hotels within 10 years and 250 within 20 years.

CapitaLand Ascott Trust acquires two Japanese hotels for USD 140 m

On 10 February, CapitaLand Ascott Trust announced the acquisition of two hotels in Tokyo's Ginza and in Kanazawa for JPY 21 bn (c. USD 140 m), an 8.3% discount to independent valuation. The two economy hotels - Ibis Styles Tokyo Ginza (224 rooms) and Chisun Budget Kanazawa Ekimae (392 rooms) - sit in core commercial districts with excellent access, each less than a 10-minute walk from the nearest station.

Market Pulse

Tier-1/2 land auctions run hot in 2025: land kings resurface, premiums at a three-year high

• 2 Jan: Beijing Haidian's Zhufang plots 29 and 30 went under the hammer the same day, closing at premiums of 17.33% and 25%, with average floor prices of RMB 89,000/sqm and RMB 95,000/sqm.
• 14 Jan: two prime plots in Xiaoshan, Hangzhou, cleared at premiums of 61.91% and 45.91%.
• 16 Jan: Shenzhen's first residential plot of 2025 went to China Overseas after 246 rounds for RMB 3.065 bn, a 70.37% premium.
• 24 Jan: Hangzhou's Hushu unit plot in Gongshu District sold after 220 fierce rounds for RMB 5.456 bn, a 71.25% premium and a floor price of RMB 64,834/sqm - Hangzhou's new unit-price land king and the city's first plot above RMB 60,000/sqm. Notably, on 22 October 2024 Greentown had taken a Qianjiang New City plot for RMB 3.422 bn at RMB 50,717/sqm, resetting the city record after eight years as the first plot above RMB 50,000/sqm - a record that lasted only two months.
• 24 Jan: Hangzhou's Xiasha unit plot in Qiantang District sold for RMB 2.01 bn at a 41.46% premium.
• 27 Jan: Chengdu's Chenghua and Qingyang districts each sold a residential plot, at premiums of 51.11% and 24.44%.
• 8 Feb: at Zhengzhou's opening auction of 2025, the Judicial Police Academy plot in Jinshui District sold after six hours at an 87.48% premium and RMB 13,713/sqm, breaking the RMB 13,411/sqm record of Vanke's Zhengfangji plot - the highest-premium residential plot in Zhengzhou since 2021.
• 18 Feb: Chengdu sold another Chenghua residential plot to China Resources Land at RMB 17,700/sqm, a 28.26% premium.
• 19 Feb: Suzhou's first listed plot of 2025 sold after 124 bids for RMB 1.429 bn, at RMB 26,754/sqm and a 21.61% premium.
• 20 Feb: Shanghai and Hangzhou auctions ran hot again, with four Shanghai plots and three Hangzhou plots all clearing at premiums.

Statistics show the nationwide average land auction premium rose to 8.7% in January 2025, the highest since 2022. Key cities ran notably hotter than the national average, with the 30 key cities averaging a 15.3% premium in January. The market shows a classic barbell distribution: plots sold at reserve price still account for 83%, those with premiums below 5% for 6%, and another 8% of plots carry premiums above 20%.