GRA Market Weekly (2025-05-31)

Policy Watch

Large state banks' deposit rates formally enter the "1 era"

Recently, the six large state-owned banks successively announced deposit rate cuts. ICBC, Agricultural Bank of China, Bank of China, China Construction Bank and Bank of Communications cut their 3-month, 6-month, 1-year and 2-year lump-sum time deposit rates by 15 bps each, to 0.65%, 0.85%, 0.95% and 1.05% respectively; 3-year and 5-year lump-sum time deposit rates were cut by 25 bps, to 1.25% and 1.3%. Notably, this is the first time on record that the 1-year time deposit rate has fallen below 1%. In addition, since April many small and mid-sized banks have sharply lowered medium- and long-term time deposit rates, by 10-40 bps; after the adjustments, most banks' time deposit rates are generally below 2%.

Shanghai: real estate trust registration pilot launched

On 27 May, the Financial Committee Office of the CPC Shanghai Municipal Committee, the National Financial Regulatory Administration Shanghai Bureau, the Shanghai Municipal Bureau of Planning and Natural Resources, the Shanghai Municipal Tax Service, the Shanghai Municipal Civil Affairs Bureau and the Pudong New Area People's Government jointly issued the Notice on Launching a Real Estate Trust Registration Pilot. The Notice comprises four main parts:

• Defining real estate trusts and real estate trust registration, and the scope of the pilot: it applies to trust institutions within Shanghai conducting real estate trust business with real estate located within Shanghai's administrative area; it also specifically clarifies the applicable scenario in which charitable organisations cooperate with trust companies to file real estate charitable trusts under a dual-trustee model
• Setting compliance requirements for real estate trust business: the Notice specifies legality and compliance requirements for trustees conducting real estate trust business, for settlors' use of the trust mechanism, and for the real estate assets contributed
• Specifying the processing flow: the Notice sets out the trust property registration process, from pre-registration and execution of trust documents to application for registration certificates and registration of trust property
• Improving other supporting mechanisms: the Notice clarifies the pilot's information-sharing mechanism, judicial safeguards and trial period, and in particular that Pudong New Area will leverage its institutional advantages to support the pilot landing first in Pudong

Hunan: deed tax subsidies for first-home purchases

On 30 May, nine departments - including the Hunan Provincial Department of Housing and Urban-Rural Development, the Provincial Development and Reform Commission, the Department of Finance, the Department of Human Resources and Social Security, the Department of Natural Resources, the Health Commission, the Hunan Provincial Tax Service, the NFRA Hunan Bureau and the PBoC Hunan Branch - jointly issued the Several Measures for Promoting the Stable and Healthy Development of the Real Estate Market in Hunan Province, easing pressure on both the supply and demand sides, promoting housing consumption, stabilising market expectations, and driving the property market's transition from "destocking" to "high-quality development". This is Hunan's first province-level policy document promoting the stable and healthy development of the property market in seven years, since 2018.

On deed tax subsidies, Hunan makes clear that, on the one hand, the distinction between ordinary and non-ordinary housing standards is abolished, and buyers with no home in the county (city/district) where they intend to purchase who buy a first new commodity home will be actively supported with deed tax subsidies; on the other hand, families with two or more minor children buying a first or second new commodity home are encouraged to receive deed tax subsidies at a certain percentage, plus cash or floor-area subsidies of a certain amount. Meanwhile, housing provident fund loan limits for two-child and three-child families with minor children will be raised by no less than 20% and 30% respectively from current levels.

Market Watch

Huatai Suzhou Hengtai Rental Housing REIT: up 30% on trading debut

On 21 May, the Huatai Suzhou Hengtai Rental Housing REIT formally listed on the Shanghai Stock Exchange. On its first trading day, the REIT surged 29.99% at the open, hitting the debut-day price cap for public REITs. In the recent subscription phase, its offline tranche was 216.91x subscribed and its public tranche 829.78x, with the offline subscription multiple setting a record high.

China Life Investment: public REITs investment fund established with Shoucheng Holdings and Caixin Life

On 22 May, China Life Investment, Shoucheng Holdings Limited and Caixin Jixiang Life Insurance Co., Ltd. signed an agreement in Beijing to establish the Beijing Pingzhun Infrastructure Real Estate Equity Investment Fund, with a target size of RMB 10 bn and a first phase of over RMB 5 bn, jointly promoting the high-quality development of China's public REITs market.

ChinaAMC Beijing Affordable Housing REIT: expansion offering passed with 71.68% of units voting, introducing strategic investors

On 23 May, ChinaAMC announced that the unitholders' meeting of the ChinaAMC Beijing Affordable Housing REIT had approved the resolutions for its first expansion offering of 2024. Unitholders voting directly or by proxy held 358,384,922 units, representing 71.68% of total fund units on the record date and meeting the quorum for convening the meeting. The expansion is a placement to specific investors (targeted expansion offering), with proposed proceeds of no more than RMB 946.2 m (inclusive) and no less than RMB 830 m (inclusive), and a ceiling of 283.2 m units (inclusive).

Shanghai: heritage garden villas on Xinhua Road fetch RMB 270 m at judicial auction, over RMB 500,000/sqm

Recently, the garden residences at Buildings 1 and 2, No. 30, Lane 329 Xinhua Road, Changning District, Shanghai were successfully auctioned. Per Ali Auction data, the foreclosed property comprises two garden villas with total GFA of 535.04 sqm: Building 1 has three storeys above ground with GFA of 426.6 sqm, and Building 2 two storeys with GFA of 108.44 sqm. The auction drew over 73,000 views, with 998 people setting reminders; after 19 rounds of bidding it closed at RMB 270 m, a premium of c. 8% over the RMB 250 m starting price, equivalent to c. RMB 504,600/sqm. Completed in 1925, the century-old villas sit in an area once home to consulates and expatriate communities, with deep historical and cultural heritage; they had previously been listed on the secondary market at RMB 350 m without finding a buyer.

Project Watch

Hangzhou: first acquisition of existing commodity housing formally completed

On 20 May, Hangzhou Anju Group Co., Ltd. ("Hangzhou Anju Group") completed the real estate title transfer registration for Building 2 of Vanke Heyu Guangnian Mansion. The move marks the successful landing of the first municipal-level project in Hangzhou to acquire existing commodity housing for use as affordable housing, taking the city's "acquire-and-convert" programme into a new stage. The counterparty is a market-based property developer and the target is self-held commodity housing: the acquired Building 2 sits in the Grand Canal New Town area of Gongshu District, was delivered in 2023 and is in bare-shell condition, comprising 17 storeys and 75 two-bedroom units of 50-60 sqm each, with total GFA of 4,152.3 sqm. Following the acquisition, the homes will be brought into the affordable rental housing pool and are expected to come into use by year-end.

Shanghai Gangcheng Group: phase one of its first large Lingang affordable rental housing project completed

On 25 May, Gangcheng Group completed phase one of its first large centralised affordable rental housing project in the Lingang New Area - the Gangcheng Lingyu (Nicheng) rental housing project. Located at Lane 66 Baixu Road, Nicheng Town, Lingang New Area, the project comprises nine 15-24-storey high-rise rental towers together with retail space, community amenities and a basement car park, providing 1,194 affordable rental units, or 35.6% of the project's total housing stock. Phase one offers a diverse mix of one- to three-bedroom layouts of c. 61-141 sqm.

BlackRock: Singapore serviced residence acquired with Weave Living

News on 23 May: global investment giant BlackRock and Hong Kong rental-apartment platform Weave Living teamed up once again, acquiring the Momentus Serviced Residences Novena tower at 12 Shan Road, Singapore for over SGD 100 m; the seller had purchased it for SGD 86.5 m in 2022. The acquired Momentus Serviced Residences Novena is a 15-storey freehold serviced-residence tower with 78 rooms in a variety of layouts of 37-60 sqm, with a minimum stay of six nights.

CapitaLand Ascendas REIT: proposed SGD 700 m acquisition of a data centre and a business park property

Recently, CapitaLand Ascendas REIT (CLAR) announced that it will acquire a data centre and a business park property for c. SGD 700.2 m. Both assets are currently fully leased to leading companies in the digital industry, e-commerce and financial services sectors. The data centre is a Tier III colocation facility at 9 Tai Seng Drive; the business park property is located at 5 Science Park Drive.

Corporate Watch

Wanda: PAG-led consortium takes over 48 Wanda Plazas nationwide in a deal reportedly reaching RMB 50 bn

Recently, information disclosed by the State Administration for Market Regulation showed that PAG (Zhuhai) Management Consulting Partnership (Limited Partnership), Gaohe Fengde (Beijing) Enterprise Management Services Co., Ltd., Tencent Holdings Limited, Beijing Panda Business Management Co., Ltd. and Sunshine Life Insurance Co., Ltd. will jointly establish a joint venture, directly or through their respective affiliates, and through it acquire 100% equity in 48 target companies held directly or indirectly by Wanda Commercial Management. All 48 target companies are Wanda Plaza projects, spread across 40 cities including Beijing, Shanghai, Guangzhou, Hefei, Chongqing, Tianjin and Wuhan, among them Beijing Wanda Plaza Enterprise Management Co., Ltd., Shanghai Zhuanqiao Wanda Plaza Investment Co., Ltd., Guangzhou Wanda Plaza Investment Co., Ltd. and Hefei Swan Lake Wanda Plaza Investment Co., Ltd.

Before the transaction, Wanda Commercial Management held 100% of the target companies directly or indirectly, with sole control. After the transaction, PAG Zhuhai, Gaohe Fengde, Tencent Holdings, Panda Business Management and Sunshine Life will jointly control the joint venture, which will hold all equity in the target companies. According to reports, market sources put the transaction value at up to RMB 50 bn: PAG plans to invest c. RMB 5 bn in the fund's subordinated tranche, with bank loans of c. RMB 30 bn and the remaining RMB 15 bn to be raised through mezzanine financing.

CapitaLand Investment: first onshore RMB master fund in China, with a projected total size of RMB 5 bn

On 21 May, CapitaLand Investment, a leading global real asset manager, established its first onshore master fund in China - the CapitaLand Investment RMB Master Fund - with total equity commitments of RMB 5 bn (SGD 921 m). CLI has brought in a leading domestic insurance institution as the master fund's main investor. Once fully invested, the master fund is expected to contribute RMB 20 bn (SGD 3.7 bn) to CLI's funds under management. The RMB master fund will invest through a series of sub-funds, focusing on quality assets with stable cash flows and long-term appreciation potential. The sub-funds' investment scope covers asset classes such as business parks, shopping malls, rental housing and serviced apartments in China's tier-1 and strong tier-2 cities; going forward, the sub-funds may also pursue special-situation investments in other sectors such as data centres, logistics parks and offices.

Blackstone: RMB 82.7 bn acquisition of an infrastructure company

Recently, TXNM Energy announced its acquisition by Blackstone's infrastructure fund at USD 61.25 per share in cash, valuing the transaction at USD 11.5 bn (c. RMB 82.7 bn) including net debt. In addition, Blackstone will subscribe for 8 million newly issued TXNM common shares at USD 50 per share via private placement, investing USD 400 m to support the company's business expansion. TXNM Energy primarily provides reliable energy services in New Mexico and Texas.

Separately, Blackstone recently released its results for the first quarter of 2025. Despite a volatile and uncertain market environment, Blackstone demonstrated strong performance: quarterly inflows reached USD 62 bn, the highest level in nearly three years, while assets under management hit a new peak of nearly USD 1.2 tn.