GRA Market Weekly (2026-02-08)

Macro Policy

General Office of the State Council: local governments encouraged to support land and facilities for tourism-residence projects alongside existing-stock absorption policies

On 29 January, the General Office of the State Council issued the "Work Plan for Accelerating the Cultivation of New Growth Drivers in Services Consumption", setting out multiple measures for the tourism-residence (lüjū) services sector. The plan proposes cultivating a group of tourism-residence destination cities and regions. Local governments are encouraged to support land supply and service facility construction for tourism-residence projects in conjunction with the implementation of policies such as absorbing existing property stock. Localities with suitable conditions will be guided to develop distinctive tourism-residence market segments and to build high-quality destination and regional public brands. Regional coordination and cross-regional sharing of public services will be strengthened, with destinations supported in moderately expanding public service provision in line with market demand.

Targeted Policies

Shanghai 2026 government work report: deepening the urban renewal programme, completing 200,000 sqm of old housing upgrades

On 3 February, the fourth session of the 16th Shanghai Municipal People's Congress convened. According to the government work report, in 2026 Shanghai will accelerate, expand and improve the efficiency of urban village redevelopment, fully commence whole-site redevelopment projects, complete 200,000 sqm of upgrades converting old housing into self-contained units, and advance the retrofitting and replacement of elevators in aging residential buildings. The plan is consistent with Shanghai's established urban renewal programme. Under the "Shanghai Urban Renewal Action Plan (2026-2028)", the city will build on the completion of its first three-year action plan in 2025 to define key tasks and renewal projects for the next three years. Urban village redevelopment is the current focus of Shanghai's urban renewal work. As of October 2025, Shanghai had commenced a cumulative 118 redevelopment projects, with successive batches moving from "construction drawings" to completed reality. Under the overall plan of the municipal Party committee and government, all whole-site redevelopment projects are to be commenced by end-2026, with urban village whole-site redevelopment substantially complete by 2027.

Shanghai: Pudong, Jing'an and Xuhui pilot the acquisition of secondary homes for subsidised rental housing

On 2 February, a signing ceremony was held for the first batch of projects in which China Construction Bank supports Shanghai's acquisition of secondary homes for government-subsidised rental housing. The signing marks the substantive launch of this work in Shanghai. Pudong New Area, Jing'an District and Xuhui District, as pilot districts, have each defined distinctive screening criteria and operating models based on local conditions, all centred on "suitable layouts, sensible configuration, mature amenities and convenient transport", and adhering to the principles of affordability for residents and sustainable operations.

Pudong New Area follows the principles of "government-led, market-based operation, voluntary participation". At the pilot stage it prioritises individually owned secondary homes with clean title inside the Inner Ring Road, built before 2000, with unit GFA below 70 sqm and total price no higher than RMB 4 m, targeting owners looking to trade up, with particular focus on areas with high rent-to-price ratios, acute supply-demand imbalances in subsidised rental housing and mature residential amenities.

Jing'an District focuses its screening on self-contained small secondary units with clean title and moderate total prices whose owners intend to trade up into new-build homes in the district (primary market preferred), prioritising locations within a 3 km radius of key industrial parks, core retail districts and metro stations. It adopts a strategy of "precinct-based acquisition as the mainstay, supplemented by scattered purchases", giving priority to areas with lower costs, convenient transport and mature amenities.

Xuhui District acquires existing small units on the open market through its district-level subsidised housing company, supplying them as subsidised rental housing after standardised fit-out. The first phase injects district fiscal funds into the subsidised housing company as capital dedicated to acquisitions, while bank loans expand the funding pool to ensure acquisitions proceed smoothly.

Haikou: public call for existing commercial housing to be used as subsidised rental housing

Haikou's Housing and Urban-Rural Development Bureau has issued a public call for existing commercial housing to be used as government-subsidised rental housing. The scope covers newly completed, unsold ordinary commercial housing in Haikou's central urban area and in key industrial parks of the Hainan Free Trade Port within its jurisdiction. Five conditions are specified: units must have complete amenities, in principle be no larger than 120 sqm, have commenced construction in 2020 or later, and have clean title. Acquisitions are made by whole building or whole entrance unit, with priority given to projects that support industrial development.

REITs Watch

First eight commercial real estate REITs accepted by the Shanghai Stock Exchange, raising c. RMB 31.475 bn in total

On 29-30 January, the first eight commercial real estate REITs were accepted by the Shanghai Stock Exchange. Their asset types span mixed-use commercial complexes, offices, hotels and retail (shopping centres and outlets). Sponsors include private enterprises (Sasseur Outlets, Intime Department Store, Shanshan Commercial), foreign-invested enterprises (CapitaLand Commercial), Shanghai SOEs (Lujiazui Group, Shanghai Real Estate Group, Jin Jiang International Group) and central SOEs (Poly Developments). Combined fundraising is c. RMB 31.475 bn, with the largest being CICC Vipshop Commercial Real Estate (RMB 7.47 bn) and the smallest Hua An Jin Jiang Commercial Real Estate (RMB 1.703 bn). Occupancy across the first eight is strong: Poly Centre Guangzhou, Dingbao Building Shanghai and Shanshan Outlets Harbin were fully let in the latest reporting period, while the 21 "Metropolo" hotels in the hotel category averaged c. 61.58% occupancy. On location, the eight assets sit predominantly in core cities with good positioning, with a few in non-provincial-capital cities.

Huatai Zijin Huazhu Anzhu Commercial Real Estate REIT lists on the Shenzhen Stock Exchange, expected to raise RMB 1.32 bn

The sponsor of the Huatai Zijin Huazhu Anzhu Commercial Real Estate REIT is Shanghai Anzhu Cijian Business Information Consulting Co., Ltd., with Huatai Securities (Shanghai) Asset Management Co., Ltd. as both fund manager and ABS manager. The offering is expected to comprise 500 m units raising c. RMB 1.32 bn, with an expected fund term of 32 years and projected distribution yields of 5.21% and 5.48% for 2026 and 2027 respectively.

The underlying assets are the Mercure Hotel & Ji Hotel project at Tianhe Sports Centre in Guangzhou and the Crystal Orange Hotel at Jiangqiao Wanda in Shanghai. Shanghai Anzhu intends to acquire two project companies from external title holders - Guangzhou Yeya Hotel Management Co., Ltd. and its branches, and Shanghai Yezhi Hotel Management Co., Ltd. - and to hold the asset ownership and corresponding operating rights of the properties through them. The Guangzhou asset had an original cost of RMB 957 m and a net book value of RMB 811 m as at end-December 2025; the Shanghai asset had an original cost of RMB 289 m and a net book value of RMB 259 m as at the same date.

Corporate Watch

Hongkong Land: launches first private real estate fund with initial AUM of c. USD 6.4 bn

On 3 February, Hongkong Land announced the launch of its "Singapore Core Private Real Estate Fund" with initial assets under management of c. USD 6.4 bn (SGD 8.2 bn). Hongkong Land acts as general partner and manager and holds a majority stake at inception, alongside founding investors the Qatar Investment Authority (QIA) and APG Asset Management, with a Southeast Asian sovereign wealth fund also participating.

The fund focuses on prime commercial office assets in Singapore. Seed assets comprise four projects including One Raffles Quay, with AUM expected to grow to SGD 15 bn over time.

ByteDance: RMB 2.8 bn for two commercial plots in Haidian, Beijing, with 20-year self-hold requirement

On 3 February, the website of the Beijing Municipal Commission of Planning and Natural Resources showed that a wholly owned subsidiary of ByteDance had acquired two commercial plots in Haidian District for RMB 2.8 bn. The plots - HD00-1603-01 and HD00-1603-03A of the Lanjing Lijia land reserve project in Haidian District - are designated B4 mixed commercial and financial services land within the catchment of the Zhongguancun Science Park, with a site area of 39,522.111 sqm and above-ground planned GFA of c. 96,811.508 sqm. The starting price was RMB 2.7955 bn for HD00-1603-01 and RMB 4.5 m for HD00-1603-03A. All above-ground and below-ground GFA transferred must be self-held for 20 years, with above-ground GFA on plots 1603-01 and 1603-03A to be used on a coordinated basis.

Under the applicable requirements, construction on both plots must commence within 12 months of signing the state-owned construction land use right transfer contract and be completed within three years of the commencement date stipulated in that contract. Land use rights run for 40 years for commercial use and 50 years for office use.

Transaction records show the winning bidder for both plots was Beijing Yunyue Changshi Technology Co., Ltd., established on 9 July 2025 with registered capital of over RMB 1.9 bn. It is a wholly owned subsidiary of ByteDance, ultimately controlled by Douyin Group (HK) Limited, with a business scope including software development, information system integration services, information technology consulting and non-residential property leasing.

Powerlong Real Estate: restructuring plans for six onshore bonds approved, totalling c. RMB 4.336 bn

On the evening of 26 January, Powerlong Real Estate (01238.HK) announced that restructuring plans for six onshore corporate bonds and asset-backed special plans issued by its subsidiary Shanghai Powerlong Industrial Development (Group) Co., Ltd. had been approved at bondholders' meetings. The six bonds total c. RMB 4.336 bn.

The restructuring plans adjust principal and interest repayment arrangements and offer bondholders options including a buyback option, an asset-for-debt option, an equity option and a general claim option.

Market Data

Secondary home transactions recover in core cities in January: 118,000 deals across 20 key cities, up 15.3% YoY

Secondary home markets in key cities opened 2026 with the continuation of "trading price for volume". According to China Index Academy data, 20 key cities recorded 118,000 secondary residential transactions in January 2026, down 3.1% MoM but up 15.3% YoY, keeping overall market activity at a reasonable level. Since Q4 last year, both new and standing listings in major cities have declined and owners' room for negotiation has narrowed slightly, indicating easing short-term supply pressure and some improvement in market expectations. Shanghai recorded 22,800 secondary transactions, up 1.1% MoM and 26.1% YoY, sustaining a high level of activity into the new year.

In 2025, secondary homes accounted for 83% of Shanghai's combined primary and secondary transaction volume (excluding subsidised housing), leaving the secondary market clearly dominant. Shanghai recorded 79,000 secondary transactions in 2025 for homes priced below RMB 4 m and smaller than 70 sqm, up 14.6% YoY and equal to 36.0% of the city's total secondary volume, up 2.8 percentage points YoY. By district, Pudong New Area led the city with 17,000 such transactions, followed by Xuhui with 4,800 and Jing'an with 4,737.