GRA Market Weekly (2025-06-28)

Policy Watch

SAFE drafts the Notice on Deepening Reform of Foreign Exchange Administration for Cross-border Investment and Financing (Consultation Draft)

On 18 June, to further facilitate cross-border investment and financing by business entities, improve the business environment and serve high-quality economic development, the State Administration of Foreign Exchange (SAFE) drafted the Notice on Deepening Reform of Foreign Exchange Administration for Cross-border Investment and Financing (Consultation Draft) (the "Notice") and opened it for public comment. The Notice covers three broad areas - deepening FX administration reform for cross-border investment, deepening FX administration reform for cross-border financing, and streamlining payments from capital-account income - comprising four investment-side policies, two financing-side policies and three payment facilitation policies, reflecting an overall orientation towards deeper FX reform, wider opening, and attracting and retaining foreign capital.

Notably, on payment facilitation for capital-account income, SAFE proposes to shorten the negative list governing the use of such income and, in light of changed market conditions, remove the restriction barring capital-account FX income and the RMB proceeds from its conversion from being used to purchase non-self-use residential property. That restriction was a macro-control measure adopted when the property market was overheating: to guard against speculative "hot money", SAFE introduced accompanying rules barring non-real-estate enterprises from using registered capital, foreign debt and similar funds to build or purchase non-self-use real estate, which played a positive role in keeping the market stable and healthy during that phase. In recent years the domestic property market has entered a new stage of development and macro controls on the sector have been recalibrated, so the related FX administration measures also need to be updated to suit the new environment and new requirements and to help the market stabilise.

Six authorities including the PBOC jointly issue the Guiding Opinions on Financial Support for Boosting and Expanding Consumption

On 24 June, six authorities - the People's Bank of China, the National Development and Reform Commission, the Ministry of Finance, the Ministry of Commerce, the National Financial Regulatory Administration and the China Securities Regulatory Commission - jointly issued the Guiding Opinions on Financial Support for Boosting and Expanding Consumption, setting out 19 key measures across six areas: supporting stronger consumption capacity, expanding financial supply for consumption, tapping and releasing household consumption potential, improving the efficiency of consumption supply, optimising the consumption environment, and policy support and safeguards.

Among other things, the Opinions support eligible consumer infrastructure in issuing infrastructure REITs, and call for exploring innovative financial products and financing models suited to funding needs in key consumer infrastructure areas such as cultural-tourism and sports facilities, event and performance venues, healthcare and elderly-care facilities, telecom base stations, charging equipment and age-friendly retrofits.

Targeted Policies

Qingdao optimises housing provident fund policies

On 26 June, the Qingdao Housing Provident Fund Management Center issued the Notice on Optimising and Adjusting Housing Provident Fund Loan Policies, recalibrating the city's provident fund lending rules. Under the new policy, the maximum combined loan amount is capped at RMB 1.7 m.

First, the stacking cap for loan support policies is adjusted. The loan-quota uplift policies for multi-child families, for purchases of high-quality or green housing, for completed (ready-to-occupy) new homes, and for flexibly employed workers may now be combined: where both the applicant and spouse qualify, the combined maximum loan is capped at RMB 1.7 m; where only the applicant qualifies, at RMB 1.1 m.

Second, the repayment-capacity coefficient is adjusted.

Third, support policies for multi-child families are refined.

Market Watch

Hangzhou: three low-density plots all sell at reserve - 88,200 sqm for RMB 1.167 bn

On 24 June, Hangzhou held another land auction: Jieli & Zhejiang Guangda Construction swept the twin plots by Long'anhu Park in Linping District, while CCCC took the Jianghai Zhicheng unit plot in Qiantang District.

The Linping twin plots sit west of Long'anhu Park, both with a plot ratio of 1.2 and a starting floor price of RMB 10,500/sqm. Jieli & Zhejiang Guangda Construction took them for a total of RMB 394.76 m, at a floor price of RMB 10,500/sqm.

The Qiantang Jianghai Zhicheng unit plot - bounded by Qingxi Third Road to the east, planned green space to the south and west, and planned Xiangmin Road to the north - covers 31,338 sqm with a plot ratio of 1.8. CCCC ultimately took it for RMB 451.22 m, a floor price of RMB 7,999/sqm. Notably, two commercial-residential plots immediately to the south sold last month, both swept by CCCC at reserve price, at floor prices of c. RMB 3,800/sqm.

Suzhou: Shangruige East plot in Shishan sells at reserve

On 25 June, the Shangruige East plot in Shishan, Suzhou was sold to Greentown Construction Management (Jiangsu Nanjing) & Suzhou Xingao Urban Development for a total of RMB 756.77 m, a floor price of RMB 20,500/sqm, with no premium.

Nanjing: Greentown and Yancheng Xingbang acquire plots

On 27 June, two low-density residential plots under Nanjing's Announcement No. 10 went under the hammer, both in Xuanwu District - one in Hongshan New Town (New Xuanwu) and one at the southern foot of Purple Mountain. Plot G23 in Hongshan New Town (New Xuanwu) went to Yancheng Xingbang Real Estate at reserve price for RMB 188 m, a floor price of RMB 12,058/sqm; plot G32 at the southern foot of Purple Mountain went to Greentown Real Estate Group after three bidding rounds for RMB 1.022 bn, a floor price of RMB 19,150/sqm, at a 0.39% premium.

Project Watch

Recently, at the centre of the Nanjing Road West skyline in Shanghai, HKRI Centre One - the premium Grade A office tower at landmark mixed-use complex HKRI Taikoo Hui - unveiled TERRA, a c. 1,100 sqm "third social space" created for tenants on its 38th-floor sky lobby. Perched at c. 180 m with sweeping views of the Shanghai skyline, TERRA occupies nearly half of the sky lobby. HKRI Centre One has built a shared space combining three functions: light dining and coffee, meetings and events, and wellness and rest. Rather than joining the price war now gripping the office leasing market, HKRI Centre One is using space and service upgrades to lift the project's positioning and tenant wellbeing. The tower's occupancy stood as high as 96% at end-2024.

Pufa Youjia X Manbo M Apartments officially unveiled

Recently, Manbo Group again joined hands with state-owned Pufa Youjia to deliver 138 premium urban residences in the Xinyangsi area of Pudong New Area - the Pufa Youjia X Manbo M Apartments. Located at the core of Shanghai's Golden Middle Ring development belt, the Xinyangsi area, the project takes a new paradigm of fashionable living as its design origin, blending contemporary urban style with elegant Eastern aesthetics. It targets the personalised needs of young affluent professionals, returnee elites and corporate executives, aiming to create a forward-looking model of premium urban living. The main unit type is a 52 sqm one-bedroom with living room and bathroom, with monthly rents from RMB 4,500.

Corporate Watch

China Jinmao buys back 49% of Jinmao Palace in Putuo, Shanghai for RMB 2.137 bn

On 24 June, China Jinmao Holdings Group announced completion of its acquisition of a 49% stake in Shanghai Taomao for total consideration of c. RMB 2.137 bn. Upon completion, Shanghai Taomao becomes an indirect wholly owned subsidiary of China Jinmao.

Shanghai Taomao is engaged in developing the Jinmao Palace project in Putuo, Shanghai, a for-sale residential project on a site of c. 29,828 sqm with plot-ratio GFA totalling c. 74,571 sqm.

Dajia Insurance invests c. RMB 3.4 bn in Shui On Land's Lingnan Tiandi

On 25 June, Shui On Land announced major transactions to increase fund commitments to the Lingnan Tiandi project and transfer equity in the project companies. Total fund commitments will be increased to RMB 3.54 bn to effect the equity transfer and to hold the project assets through the project companies. The existing shareholder will transfer its 100% stakes in Foshan Shui On and Foshan Anying to the fund for total consideration (subject to adjustment) of c. RMB 3.49 bn. The fund is Qingdao Ruijian Private Equity Investment Fund Partnership; its GP 1, GP 2 and LP are all indirectly owned by an insurance company ultimately owned by China's Ministry of Finance - on a look-through basis, Dajia Life Insurance Co., Ltd.

The project companies mainly hold and operate Lingnan Tiandi, including land use rights over commercial land north of Dongxili, west of Fuxian Road, east of Tiandi Road and south of Liangyuan Road in Chancheng District, Foshan, Guangdong, together with the buildings and structures thereon, with total saleable and leasable GFA of c. 55,325 sqm.

China Telecom completes private fund registration

On 16 June, China Telecom Private Fund Management Co., Ltd. ("China Telecom Private Fund") completed registration with the Asset Management Association of China. The company has registered capital of RMB 200 m, of which RMB 50 m is paid in, is registered in Shunyi District, Beijing with offices in Xicheng District, and currently has six full-time employees. Wholly owned by China Telecom Group Investment Co., Ltd., its business focuses on frontier technology sectors such as cloud computing and cybersecurity.

Hong Kong residential rents climb

According to The Standard, by early May this year rents in key districts around universities - Tai Po, Sha Tin and Sai Wan - had broadly risen 10%, far outpacing the 3%-5% gains in the overall residential market. Midland Realty's rental trend data show Hong Kong's leasing market extended its strength in May 2025: average private residential rents reached c. HKD 38.1 per sq ft of saleable area, up 0.21% month-on-month for a fourth consecutive monthly rise, a near-6-year (70-month) high just 0.6% below the July 2019 record. In the first ten months of 2024, the rental index climbed a cumulative 4.78%, forming a seven-month "rent surge", driven above all by the dual influx of talent and students.

Longfor Group's annual general meeting

At Longfor Group's recent annual general meeting in Hong Kong, board chairman Chen Xuping solemnly declared: "2025 will be the final year of Longfor's journey through the cycle on the debt front." The "non-development" fleet - malls, rental housing and property services - has become the core engine carrying Longfor through the winter:

Commercial operations - Longfor's mall business formally entered the "100-mall era" in 2024, with over 100 malls open, full-year rental income of RMB 13.52 bn and occupancy steady at a high 96.8%
Asset management - long-term rental apartment brand Goyoo has 124,000 rooms in operation, with overall occupancy as high as 95.3%
Smart living - Longfor Intelligent Living posted 2024 revenue of RMB 13.19 bn, with property management GFA of 410 m sqm
Smart construction - Longzhizao entered the project management market through "smart construction", differentiating itself from traditional project management players; in 2024 it signed over 100 new property service projects spanning industrial parks, corporate headquarters, urban services and other scenarios

Longfor's 2024 operating data show a development-business margin of just 1.31%, against a 75% gross margin in the operations business and 31.4% in the services business. In January-May this year, Longfor's operations and services revenue reached RMB 11.02 bn, up 2.51% YoY - c. RMB 5.91 bn from operations and RMB 5.11 bn from services. This structural advantage directly underpins Longfor's financial resilience.

Debt workouts approved for more than ten developers

Recently, debt restructuring and reorganisation of distressed developers has accelerated: the offshore debt restructurings of Kaisa, Sunac and Golden Wheel Tiandi have largely been approved by creditors. A minority of branded developers have opted for court-supervised reorganisation to resolve their debt crises: the draft reorganisation plans of Jinke and Sincere Yuanchuang have been approved by the courts and will proceed to implementation. Caixin Development and Suning Real Estate also entered bankruptcy reorganisation in 2025, accelerating risk clearance among developers.

In 2025, developers' outstanding offshore debt stands at just over RMB 100 bn, well below past peaks. The sector has passed its offshore repayment peak, and with restructurings layered on top, maturities will lengthen markedly and volumes shrink noticeably, gradually easing offshore debt risk - also a precondition for offshore financing channels to reopen.