China Real Estate Research Institute: Overall transaction volume in the real estate market increased month-on-month in October, while the supply and demand of residential land decreased year-on-year

Market Research Report: October Real Estate Market Overview

According to the Zhizhong Research Institute, the transaction volume in the real estate market in October increased overall compared to the previous month, with all-tier cities experiencing simultaneous growth. First-tier cities saw significant increases, with Guangzhou and Shenzhen leading the way. The total inventory area slightly decreased month-on-month, with Shenzhen experiencing the highest decrease at 6.76%. In terms of land, the overall supply and demand in monitored cities decreased year-on-year in October, with residential land release volume dropping by over 20%. Overall transaction volume and prices declined, with a nearly 60% decrease in transaction volume in first-tier cities.

Real estate developers mainly relied on non-bank financing such as medium-term notes and corporate bonds, while some companies obtained funds through short-term financing instruments. Land acquisition by real estate developers was concentrated in cities like Beijing, Shanghai, Suzhou, and Hangzhou. For instance, China Jinmao acquired a redevelopment land parcel in Dongtieying Shantytown, Fengtai District, Beijing for a minimum price of 4.013 billion yuan.

Policy-wise, multiple ministries including the Ministry of Finance, Ministry of Housing and Urban-Rural Development, and the People's Bank of China implemented stable real estate incremental policies. The central bank reduced interest rates by 25 basis points. Tianjin lifted purchase restrictions, while Tianjin, Hangzhou, Xi'an, and other cities optimized price restrictions. In terms of transactions, the overall transaction volume in the real estate market increased month-on-month in October, with all-tier cities experiencing simultaneous growth and significant increases in first-tier cities like Guangzhou and Shenzhen.

Land-wise, the total amount of land transfer fees decreased by over 50% year-on-year, with Ningbo leading with over 15 billion yuan in land acquisition fees. The Yangtze River Delta region saw a high concentration of residential land entering the market, occupying 16 spots on the list of total land transfer fees.

Transactions

In October, the overall real estate market transaction volume increased month-on-month, with significant increases in first-tier cities.

Monthly Overview: Overall month-on-month increase, narrowing year-on-year decline

First-tier Cities: Both month-on-month and year-on-year increases, significant growth in Guangzhou and Shenzhen

In October, the transaction area in first-tier cities increased month-on-month, with growth rates of 45.69% and 11.58% respectively. Among the cities, Guangzhou and Shenzhen saw the largest month-on-month increases of 96.0% and 95.3% respectively, followed by Beijing at 45.7% and Shanghai at 3.7%. Year-on-year, Guangzhou and Shenzhen showed significant increases of 40.6% and 28.6% respectively, while Beijing and Shanghai experienced slight year-on-year declines of 7.8% and 4.2% respectively.

Second- and third-tier cities: Second-tier cities as a whole decreased on a month-on-month basis, while third and fourth-tier cities increased

In October, the transaction area of second-tier representative cities increased slightly by 6.05% month-on-month, but still decreased by 19.04% year-on-year. Among them, Wuhan, Nanning, and Suzhou all saw month-on-month increases, with Wuhan having the largest increase at 77.05%, followed by Nanning at 76.56%. On the other hand, Wenzhou, Hangzhou, Qingdao, Ningbo, and Jinan experienced month-on-month declines, with Wenzhou having the largest decrease at 40.30%. The transaction volume of third and fourth-tier representative cities increased both month-on-month and year-on-year, with a month-on-month increase of 43.23%, ranking second only to first-tier cities. Year-on-year, there was a 17.51% increase, the largest among all city tiers. Except for Zunyi, Zhoushan, and Weifang, all other cities saw month-on-month increases. Tai'an had the largest increase at 95.98%, followed by Dongguan, while Zunyi saw a slight decrease of 9.20% month-on-month.

Inventory: Slight decrease in total inventory

The monitored inventory area of 7 representative cities decreased by 1.91% month-on-month. Among them, Shenzhen had the largest decrease in inventory at 6.76%, followed by Guangzhou at 5.25%. Wenzhou had the largest increase in inventory, rising by 0.82% month-on-month.

Commercial and office space

Foshan optimizes real estate policies

On October 24th, the Foshan Municipal Housing and Urban-Rural Development Bureau and five other departments jointly issued a notice to further optimize measures for the stable and healthy development of the real estate market. This policy adjustment aims to comprehensively implement the decisions and arrangements of the Party Central Committee and the State Council, accelerate the establishment of a new development model for real estate, and continue to promote the stable and healthy development of the real estate market in Foshan. The notice specifies the cancellation of restrictive housing transaction policies, allowing resident families in Zhumiao Street, Nanhai District, and Daliang Street, Shunde District to purchase newly built commercial housing without restrictions on the listing and trading period. Commercial housing can be listed for trading immediately upon obtaining the real estate ownership certificate. Additionally, it supports the combination of urban village renovation with the sale of existing commercial housing, optimizes the acquisition and resettlement of existing commercial housing, and reduces taxes and fees. Furthermore, it allows self-owned commercial housing to be listed for circulation, optimizes planning adjustments, improves the quality of land supply, enhances the housing supply structure, optimizes parking space requirements and sales policies, increases support for housing purchases with housing provident funds, cancels the standards for ordinary and non-ordinary residential properties, and regulates real estate brokerage services.

Guangzhou Qingsheng Pioneer Zone Exhibition Center officially launched

On October 23rd, the first building of the YueXiu iPARK Guangdong-Hong Kong Cloud Valley project in the Qingsheng Hub area of Guangzhou was topped out, marking a new chapter in the development of the technology industry in the region. The project covers an area of 39 acres and plans to build industrial carriers such as enterprise single buildings, R&D buildings, and incubation buildings for research and development, pilot testing, and light production technology enterprises, aiming to create a nationally renowned model area for new university towns High-tech enterprise headquarters agglomeration area and technology enterprise incubation demonstration area. The project is expected to start production in 2026 and achieve stable operation by 2030. The topping-out ceremony of Yuexiu iPARK Guangdong-Hong Kong Cloud Valley project not only provides a high-quality environment for the gathering and innovation of technology enterprises but also helps the regional economic transformation and development. During the project construction period, the Nansha Industrial Park Management Bureau in Guangzhou provided comprehensive construction services, including improving surrounding supporting roads, accelerating the construction of the Innovation Road to meet construction needs, temporarily transferring nearby roads to support project development, assisting the project party in temporary land use for worker accommodation, and guiding the planning of fire-fighting high-rise places.

These measures ensure the efficient progress and safe construction of the project. On the same day, the Qingsheng Pioneer Start-up Area Exhibition Center jointly created by the Nansha Industrial Park Management Bureau and Yuexiu iPARK Guangdong-Hong Kong Cloud Valley was officially launched, marking another milestone in the construction of Qingsheng. The Qingsheng Pioneer Start-up Area Exhibition Center is located at No. 2 Duxue Road, Nansha District, with functional service spaces such as urban exhibition hall, technology exhibition, conference services, and roadshow hall, fully integrating modern technological elements and regional planning design, striving to create a comprehensive platform integrating display, communication, and experience. As the external display window of the Qingsheng Hub Block, the exhibition center will provide exhibition display, conference services, enterprise services, and scientific and technological exchange services for government and enterprise visitors, academic researchers, block-settled enterprises, and social visitors, and can also provide exhibition venues and related services for enterprises in need. At the same time, the exhibition center will actively help introduce high-quality projects, high-end talents, and innovative resources to inject new vitality and momentum into the continuous development of the Qingsheng Pioneer Start-up Area.

Jiayuan International Officially Delisted

On October 23, Jiayuan International Holdings announced that, according to the decision of the Listing Committee of the Hong Kong Stock Exchange, the company will be delisted. The announcement shows that, according to Rule 6.01A(1) of the Listing Rules, due to Jiayuan International Holdings' failure to resume trading of shares within the specified time, failure to disclose the full-year performance for 2022 and subsequent financial performance, the winding-up order not being withdrawn or lifted, insolvency, the winding-up order being effective, failure to prove the integrity, ability, and character of the management and persons with significant influence, the Stock Exchange decided to cancel its listing status. The last trading date of Jiayuan International Holdings is set for October 28, 2024, and the listing status will be officially canceled on the next day, October 29, at 9:00 am.

Information shows that Jiayuan International Holdings, headquartered in Jiaxing, Zhejiang, was listed on the main board of the Hong Kong Stock Exchange in March 2016. The company develops large residential and commercial complex projects in major cities in mainland China. As of June 30, 2022, it had a total land reserve of approximately 16.6 million square meters and a total of 98 property projects in China. On May 2 last year, Jiayuan International, a listed real estate company controlled by the wealthy Shen Tianqing from Jiaxing, Zhejiang, announced that the Hong Kong court issued a winding-up order, requiring the company to wind up to repay the overdue $14.5 million debt. This made it the first of the top 100 listed real estate companies in Hong Kong to be ordered to wind up in this round of real estate debt defaults. On June 4, 2024, Jiayuan International Holdings announced on the Hong Kong Stock Exchange that during the preparation of the 2022 annual performance by its listed subsidiary Jiayuan Service Holdings Limited and its affiliates, it was found that there were multiple abnormal financial records between Jiayuan Service Group and certain entities The preliminary investigation results show that China Jiayuan Holdings Group Co., Ltd. bypassed the Jiayuan Service Board of Directors and senior management in 2022, directly instructing the Jiayuan Service Group's finance department to transfer a large amount of funds to Mingyuan Group Investment Co., Ltd. and several parties to clear the debts of companies controlled by Shen Tianqing. As Shen Tianqing indirectly owns equity in China Jiayuan, and considering the possibility of misappropriation or misuse of funds of the listed subsidiary Jiayuan Service by Shen Tianqing, who is the ultimate controlling shareholder of the company, the Stock Exchange is concerned about the integrity of the company's management and/or individuals with significant influence on the company's management and operations. Trading of Jiayuan International Holdings shares on the Stock Exchange has been suspended from 9:00 am on April 3, 2023, and will remain suspended until further notice.

Keppel Sells Tianjin Shengjie Olympic Tower Serviced Apartments

According to Keppel, its subsidiary, the Class Trust (CLAS), has agreed to sell a serviced apartment in Tianjin to an undisclosed third party. The transaction is expected to be completed in the second quarter of 2025. The Singapore-listed real estate investment trust stated that it will sell the Tianjin Shengjie Olympic Tower serviced apartment, which has 185 serviced apartments, at a price higher than the book value, with more details to be disclosed after the transaction is completed. Serena Teo, CEO of Keppel Class Trust, stated, "By divesting mature properties like the Tianjin Shengjie Olympic Tower serviced apartment, we continue to restructure CLAS's investment portfolio and redeploy the proceeds to more optimized uses. In the first half of 2024, CLAS's properties in China accounted for 1.4% of our total gross profit. The sale of the Tianjin Shengjie Olympic Tower serviced apartment will have a minimal impact on our gross profit."

According to the official website, the Tianjin Shengjie Olympic Tower serviced apartment is located in the central business district of Tianjin, with office buildings and shopping centers nearby. It is approximately 5 kilometers from Tianjin Station and about 22 kilometers from Tianjin Binhai International Airport. As a global, diversified real estate group, as of June 30, 2024, Keppel had assets under management of approximately SGD 134 billion, fund assets under management of SGD 100 billion, held through 6 listed Real Estate Investment Trusts (REITs) and commercial trusts, as well as a range of thematic and strategic real estate private investment tools. Keppel's business spans over 250 cities in more than 30 countries, with a diverse portfolio of assets including integrated developments, shopping centers, office buildings, accommodations, residences, and new economy sectors such as industrial parks, industrial and logistics real estate, and data centers.

Land

Overall Situation: Overall supply and demand decreased year-on-year, with both volume and price declining in transactions

In October, the overall supply and demand in monitored cities decreased year-on-year, with residential land supply decreasing by over 20%, and overall transaction volume and price declining, with transaction volume in first-tier cities dropping by nearly 60%. The total amount of land transfer fees decreased by over 50% year-on-year, with Ningbo leading with over 15 billion, and the Yangtze River Delta region seeing a high density of residential land entering the market, occupying 16 spots on the land transfer fee leaderboard.

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Major Cities: Land transfer fees decrease in first-tier cities, average prices drop in second-tier cities

The total amount of land transfer fees in first-tier cities decreased by nearly 30% year-on-year, with average transaction prices dropping by over 30% year-on-year and transaction volume decreasing by nearly 60%; second-tier cities saw a nearly 40% year-on-year decrease in supply, with transaction volume dropping by nearly 60% and total land transfer fees decreasing by almost 60%; supply in third and fourth-tier cities decreased year-on-year, while average transaction prices increased by over 40% and the total amount of land transfer fees decreased by nearly 30%.

Land Transfer Fees: Year-on-year decrease in total land transfer fees, Ningbo leads with over 15 billion in revenue

The total amount of land transfer fees decreased year-on-year, with cities in the Yangtze River Delta region occupying 16 spots on the list. First-tier cities accounted for over 10% of the revenue, with Ningbo leading the list with over 15 billion in revenue.

Top 10 Total Land Prices: Year-on-year decrease in total amount, Bao'an District in Shenzhen tops the list

The total amount on the list decreased year-on-year, with the entry threshold lowered to 1.78 billion. First-tier cities occupied six spots on the list, with Bao'an District in Shenzhen leading with a transaction price of 6.67 billion.

Top 10 Land Unit Prices: Year-on-year decrease in average prices, Yangpu District in Shanghai leads

The average prices on the list decreased by over 10% year-on-year, with the entry threshold lowered to 28,584 yuan per square meter. First-tier cities occupied nine spots on the list, with Yangpu District in Shanghai leading in terms of unit price.

Enterprises

Real estate companies mainly rely on non-bank financing such as medium-term notes and corporate bonds, with some companies obtaining funds through commercial papers and other short-term financing methods. The cities where real estate companies acquire land are concentrated in Beijing, Shanghai, Suzhou, Hangzhou, and other cities. For example, China Jinmao won the bid for the reconstruction site of Dongtieying Shantytown in Fengtai District, Beijing, with a minimum price of 4.013 billion yuan.

Investment and Financing: China Communications Construction Real Estate Group successfully issued 2 billion yuan in medium-term notes; China Jinmao won the bid for the reconstruction site of Dongtieying Shantytown in Fengtai District, Beijing, with a minimum price of 4.013 billion yuan.

Real estate companies mainly rely on non-bank financing such as medium-term notes and corporate bonds, with some companies obtaining funds through commercial papers and other short-term financing methods. For example, on October 22nd, China Communications Construction Real Estate Group Co., Ltd. announced the successful issuance of the second phase of medium-term notes for the year 2024, with the total issuance amount of Class A and Class B being 800 million and 1.2 billion yuan respectively The bond of Variety One has a term of 2+1 years, with an actual total issuance amount of 800 million RMB and an issuance interest rate of 3.18%; the bond of Variety Two has a term of 3 years, with an actual total issuance amount of 1.2 billion RMB and an issuance interest rate of 3.49%. On the same day, Xiamen Jianfa Co., Ltd. announced the successful issuance of the 4th tranche of ultra-short-term financing notes for the year 2024. This bond is referred to as "24 Jianfa SCP004", with a term of 178 days, an interest start date of October 22, 2024, and a maturity date of April 18, 2025. The planned and actual total issuance amount is both 100 million RMB. On October 24, China Construction Fourth Engineering Bureau Co., Ltd. announced the successful issuance of the 2nd tranche of medium-term notes (Innovation Notes) for the year 2024, referred to as 24 Zhongjian Siju MTN002 (Innovation Notes), with the bond code 102484532. The term of the note is 3+N years, with an interest start date set on October 23, 2024. The base amount of this issuance is 0 billion RMB, while the upper limit of the issuance amount is 1.3 billion RMB. The final actual issuance amount reached the upper limit, totaling 1.3 billion RMB, with an issuance interest rate of 2.69%.

Last week, real estate companies focused their land acquisitions mainly in cities such as Beijing, Shanghai, Suzhou, and Hangzhou. On October 22, the shantytown renovation and environmental improvement project CP00-1802-0005, 0007, 0008 in Xiaoshahe Village and surrounding areas of Changping District, Beijing was successfully auctioned. It was won by Yuexiu & Future Science City at a base price of 2.533 billion RMB, with a transaction floor price of 25,004 RMB per square meter.

On the same day, a residential land in the second phase of Qianjiang New City in Hangzhou was auctioned. The land, located in Unit JG1402-36 of Sibaoqibao, south of Tianchang Guanchao Primary School in Hangzhou, has an area of 26,990 square meters and a planned construction area of 67,475 square meters. It was listed with a starting price of 2.662 billion RMB and a starting floor price of 39,454 RMB per square meter. After 77 rounds of bidding, the land was won by Hangzhou Greentown Zhizhen Urban Development Construction Co., Ltd. (Greentown) at a total price of 3.422 billion RMB, with a premium rate of 28.55% and a transaction floor price of 50,717 RMB per square meter.

On October 23, there were land transactions in Fengtai and Tongzhou districts of Beijing. Among them, China Jinmao won the bid for Class R2 residential land in Dongtieying shantytown renovation and environmental improvement project FT00-0512-0010, FT00-0512-0015 in Fengtai District at a base price of 4.013 billion RMB. The floor price is 57,000 RMB per square meter, with a sales guidance price of 107,500 RMB per square meter, floating by 8%. The land covers an area of approximately 33,000 square meters, with a planned construction area of about 72,100 square meters. FT00-0512-0010 has a land area of 20,700 square meters, a plot ratio of 1.9, a planned construction scale of 38,900 square meters, and a building height of 60 meters; FT00-0512-0015 has a land area of 12,500 square meters, a plot ratio of 2.7, a planned construction area of 33,200 square meters, and a building control height of 60 meters.

On October 25, six batches of land in Shanghai were put up for auction. Among them, the land in Dinghai Community of Yangpu District has a land area of 18,584.12 square meters, a plot ratio of 2.50, a planned construction area of 46,460.31 square meters, a starting price of 3.1401 billion RMB, and a starting floor price of 67,587 RMB per square meter. There were 2 bidders (China Overseas Land & Investment and Poly Real Estate) participating in the on-site bidding, and eventually China Overseas Land & Investment won the bid at a total price of 3.213 billion RMB, with a transaction floor price of 69,158 RMB per square meter Premium rate 2.32%; Baoshan District Dachang Town land area 65,227.06 square meters, planned construction area 232,878.37 square meters, starting price 4.612 billion yuan, starting floor price 19,803 yuan/square meter, won by China Resources at the base price; Minhang District Pujiang Town land area 69,492.56 square meters, planned construction area 140,630.37 square meters, starting price 4.106 billion yuan, starting floor price 29,200 yuan/square meter, won by Xiangyu at the base price; Minhang District Huacao Town land area 43,479.87 square meters, plot ratio 2.0, planned construction area 86,959.74 square meters, starting price 2.913 billion yuan, starting floor price 33,500 yuan/square meter, won by Shanghai Urban Investment at the base price.

Other Major Events

Beijing Daxing Airport Economic Zone plans to build an international convention and exhibition center in the air, will cooperate with Beichen Industrial

On October 23, it was reported that the Beijing Daxing International Airport Economic Zone plans to build an international convention and exhibition center, with the first phase of the project expected to be completed in 2028, with a total area of 200,000 square meters. It is reported that the industrial zone of the Daxing International Airport Economic Zone will launch a 1.6 million square meters international convention and exhibition consumption area. Among them, the first phase of production will introduce a 200,000 square meter convention and exhibition center, surpassing the scale of convention and exhibition facilities in Beijing's Capital and Shunyi. The project will cooperate with Beijing Beichen Industrial Group, with plans to start construction in 2025-2026 and be completed in 2028