GRA Market Weekly (2025-05-10)

Macro Policy

SCIO: package of financial policies to stabilise markets and expectations, with the PBoC rolling out ten measures across three categories

On 7 May, the State Council Information Office held a press conference at which officials from the People's Bank of China, the National Financial Regulatory Administration and the China Securities Regulatory Commission briefed the media on the "package of financial policies to support stable markets and stable expectations". The PBoC said it would step up the intensity of macro adjustment with a package of monetary policy measures, comprising ten measures across three main categories:

Cutting the reserve requirement ratio by 50 bps, expected to provide c. RMB 1 tn of long-term liquidity to the market
Refining the reserve requirement regime, temporarily lowering the reserve requirement ratio for auto finance companies and financial leasing companies from the current 5% to 0%
Cutting the policy rate by 10 bps, taking the 7-day open market reverse repo rate from the current 1.5% to 1.4%, which is expected to bring the loan prime rate (LPR) down by c. 10 bps in tandem
Cutting structural monetary policy tool rates by 25 bps, including all special structural tool rates and the agriculture- and small-business relending rate, each from the current 1.75% to 1.5% (these are the rates at which the central bank provides relending funds to commercial banks); and the pledged supplementary lending (PSL) rate from the current 2.25% to 2% (PSL is a tool through which the central bank provides funds to policy banks)
Cutting the individual housing provident fund mortgage rate by 25 bps, taking the over-5-year first-home rate from 2.85% to 2.6%, with rates for other tenors adjusted in tandem
Adding RMB 300 bn to the technology innovation and equipment upgrade relending quota, raising it from the current RMB 500 bn to RMB 800 bn, in continued support of the "two new" policies - large-scale equipment renewal and consumer goods trade-in
Establishing a RMB 500 bn "service consumption and elderly care relending" facility to guide commercial banks towards greater credit support for service consumption and elderly care
Adding RMB 300 bn to the agriculture- and small-business relending quota, working in synergy with the relending rate cut to support banks in expanding lending to agriculture-related, micro and small, and private enterprises
Optimising the two monetary policy tools supporting capital markets, merging the quotas of the RMB 500 bn swap facility for securities, fund and insurance companies and the RMB 300 bn share buyback and shareholding-increase relending facility into a combined RMB 800 bn
Creating a risk-sharing tool for technology innovation bonds, under which the central bank provides low-cost relending funds that may be used to purchase technology innovation bonds, and works with local governments and market-based credit enhancement institutions to share part of the default loss risk through joint guarantees and other credit enhancement measures, supporting technology innovation enterprises and equity investment institutions in issuing low-cost, long-tenor tech innovation bonds

NFRA: accelerating a suite of financing rules aligned with the new real estate development model

The National Financial Regulatory Administration said it will accelerate the introduction of a suite of financing rules aligned with the new real estate development model, helping to consolidate the stabilisation of the property market. It also set out the following measures:

Further expanding the pilot scheme for long-term investment by insurance capital, bringing more incremental funds into the market
Adjusting and optimising regulatory rules, further lowering the risk factor for insurers' equity investments to support stable and active capital markets
Rolling out, as soon as possible, a package of policies supporting financing for micro, small and private enterprises, and deepening the financing coordination mechanism to help stabilise enterprises and the economy
Formulating and implementing a series of banking and insurance policy measures to support foreign trade, providing targeted services to market participants most affected by tariffs and doing everything possible to help them stabilise operations and expand markets
Revising and issuing administrative rules for acquisition loans to accelerate industrial transformation and upgrading
Extending eligibility to establish financial asset investment companies to qualified national commercial banks, increasing investment in technology innovation enterprises
Formulating guidance on the high-quality development of technology insurance, to better perform its risk-sharing and compensation role and provide robust support for technology innovation

Targeted Policies

Multiple cities cut provident fund mortgage rates by 25 bps, effective 8 May

Beijing, Shanghai, Guangzhou, Shenzhen, Xi'an, Changsha, Hainan, Zhuhai, Zhengzhou, Hefei and other cities announced a 25 bps cut to individual provident fund mortgage rates effective 8 May.

For existing individual housing provident fund mortgages, loans disbursed before 8 May 2025 (exclusive) will continue at the original rate for the remainder of the year, switching to the adjusted rate from 1 January 2026. For applications accepted but not yet disbursed before 8 May, the adjusted rate will apply upon disbursement.

Market Watch

Shanghai: fourth land auction batch sells all four residential plots for c. RMB 9.7 bn

On 9 May, Shanghai's fourth land auction batch opened and all four residential plots sold successfully, raising c. RMB 9.7 bn in total. Poly Property acquired plot L4-02 in unit N090602 of Yangpu District for RMB 4.24063 bn; the plot sits on the southern stretch of the Yangpu riverfront, c. 500 m from the Huangpu River in a straight line, with a chance of river views from the upper floors. As a pure residential plot, it had a starting accommodation value of RMB 63,500/sqm, site area of 21,200 sqm, a 60 m height limit, a plot ratio of 2.5 and residential GFA of c. 53,000 sqm - a moderate scale - clearing at a final accommodation value of RMB 80,199/sqm and a premium of 26.3%. China Railway Construction acquired plot C03A-04 in unit SJC10006 of Songjiang District for RMB 2.47082 bn, at an accommodation value of RMB 25,288/sqm and a premium of 20.42%. The Hongkou and Qingpu plots sold at reserve price to Bund Riverside (North Bund) Group and Poly Developments respectively.

Shanghai: Zhapu Road 100-metre luxury land package in Hongkou sells at reserve price for RMB 2.157 bn

On 9 May, plots hk196-08 (residential) and hk196-06 (commercial and cultural use) in unit C080101 of the North Bund, Hongkou District were offered as a bundled package, with Bund Riverside (North Bund) Group acquiring them at the reserve price of RMB 2.157 bn - marking the Zhapu Road film and television base's formal transition from planning blueprint to construction. The plots sit in the North Bund, one street from the North Bund International Business District, immediately adjoining the high-end Rainbow City residential area to the northeast, with extensive waterfront, greenery and other public space nearby, while mid-to-upper floors command partial skyline views of the North Bund, Lujiazui and the Bund. The two plots have total GFA of 32,100 sqm and will form a combined "film and television plus residential" development model. Plot hk196-06, the first plot released for the Zhapu Road film and television base, is designed on a "restore as was" principle, integrating heritage assets such as the Victory Cinema and Jiangyuan Lane and recreating 1930s shikumen settings to deliver immersive filming and consumer experiences.

Project Watch

Espressif Systems: acquires Yuqiao office building in Pudong, Shanghai for RMB 437 m

Espressif Systems (Shanghai) Co., Ltd. recently disclosed its plan to acquire, from Shanghai Lujiazui (Group) Co., Ltd., a property at Building 3, No. 3, Lane 235 Yubei Road, Pudong, Shanghai. The target property has GFA of 12,996.91 sqm (including 735.51 sqm below ground), for a total consideration of RMB 436,696,176.00 (with the final area and transaction amount subject to the executed sale and purchase agreement and title documents). Funding comes from part of the proceeds of a refinancing and from the company's own funds.

The property is Zhihui Yun at Zhangjiang Science City's Digital Intelligence Land, located on plot 03B-03 in Yuqiao, north of Yu Centre, a five-minute walk from Kanghengroad Station on Metro Line 11. The scheme has total GFA of c. 112,000 sqm, comprising one 80 m Grade A office tower (R&D designation), two standalone headquarters office buildings (R&D designation), six quality rental apartment buildings (c. 60,000 sqm) and 992 car parking spaces.

Corporate Watch

Blackstone: acquires the Kimpton Eventi Hotel in New York for USD 175 m

Blackstone's hotel investment platform BRE Hotels recently completed the acquisition of the Kimpton Eventi Hotel in New York for c. USD 175 m from DLJ Real Estate Capital Partners. The 292-room hotel in Manhattan's Chelsea district has, since opening in 2010, held a core position at the intersection of the arts and technology industries, adjoining a park and Google's headquarters, just three blocks from Hudson Yards and an eight-minute walk from Penn Station, with the regional headquarters of 23 Fortune Global 500 companies nearby. RevPAR reached USD 389 in 2024 (c. RMB 2,800), 27% above the Chelsea submarket average, at an average occupancy of 82%.

Data show Manhattan hotel transaction cap rates compressed to 4.8% in Q1 2025 (from 5.3% in 2024), indicating strengthening asset valuations. The transaction again confirms the safe-haven characteristics of high-end hotels in core cities: despite the Federal Reserve holding rates high, foreign capital still accounted for 58% of New York hotel investment in 2025, with Middle Eastern sovereign funds and Asian insurance capital notably more active.

BlackRock: acquires CapitaLand's Singapore serviced residence for SGD 280 m

Singapore's CapitaLand Integrated Commercial Trust (CICT) recently sold the Citadines Raffles Place serviced residence within the landmark CapitaSpring tower to a consortium of BlackRock and Malaysia's YTL Group for SGD 280 m (c. RMB 1.62 bn). The 299-key asset in the core Raffles Place district set a new premium record for Singapore serviced residence transactions at an exit yield of 3.6%; the 51-storey vertical integrated complex it occupies hosts multinational regional headquarters and green finance operations, a five-minute walk from Marina Bay Financial Centre. BlackRock completed the acquisition through its USD 12 bn Asia city infrastructure fund, continuing its "core-plus" alternative asset allocation strategy.

Market Data

Shanghai secondary market extends its recovery over the May Day holiday, with 1,199 transactions in five days

Between 28 April and 4 May, leading Shanghai secondary-home agencies recorded 134,790 viewings, 1.6 times the level over last year's May Day holiday. From 1 to 5 May, 1,199 secondary homes were transacted - the second-highest in five years, behind only the 1,710 recorded over the same period in 2023. By product, entry-level homes priced below RMB 3 m remained the backbone of the market; Shanghai's secondary market is still characterised by first-time demand providing the floor while upgraders stay on the sidelines.

Of the RMB 176.3 bn of new local government special bonds issued nationwide in April, RMB 71.7 bn went to real estate-related sectors - a 40% share, up 8 percentage points from the prior month. Of that, RMB 33.6 bn was explicitly designated primarily for real estate, up 30% MoM from March. On a cumulative basis, new special bond issuance totalled RMB 1.1 tn from January to April, of which RMB 389.1 bn went to real estate-related sectors (a 35% share), with RMB 164.6 bn explicitly designated primarily for real estate (a 15% share).