China’s property investors target domestic M&As amid capital curbs
The value of mergers and acquisitions in China’s property sector has hit a new high in the second quarter of 2017
As Beijing strengthens its crackdown on capital outflows since the start of the year, deep-pocketed Chinese property developers have turned their shopping targets back to the ones on home turf, a trend that analysts say will accelerate in the coming months.
Already, the value of mergers and acquisitions (M&A) in China’s property sector has hit a new high in the second quarter of 2017 to 94 billion yuan (US$13.98 billion), representing a whooping 339 per cent year on year growth, according to Moody’s. It also expects the volume in the third quarter to outstrip the previous quarter as a number of big acquisitions were announced in July.
The most eye-catching deals in July included Dalian Wanda Group’s 63.7 billion yuan sale of its tourism projects and hotels to rivals, Sunac China and Guangzhou R&F Properties, and the proposed US$11.6 billion (79 billion yuan) buyout of Singapore-listed Global Logistic Properties by a Chinese consortium led by includes China Vanke. GLP is the largest operator of warehouses in China.
One month earlier, China Vanke – the country’s second largest developer – had only announced that it was paying 55.1 billion yuan to acquire the property assets of Guangdong International Trust and Investment Corporation.
