China property

Top 20 developers share a larger chunk of China’s property market

Experts now predict consolidation is inevitable with the total number of Chinese developers shrinking to just 3,000 from the current 50,000 by 2020

PUBLISHED : Thursday, 05 January, 2017, 6:20pm
UPDATED : Thursday, 05 January, 2017, 10:59pm

China’s top 20 property developers took up more than a quarter of the market share last year, according to a leading market monitoring agency.

Combined sales of the top 20 developers in terms of annual contracted sales hit 2.979 trillion yuan ­(HK$3.35 trillion), according to the China Index Academy’s data. That would account for 25.5 per cent of the national property sales (projected) for last year.

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The figure is up from 1.956 trillion yuan, or 22.4 per cent of the market share, recorded in 2015, based on the same list by the academy. Five years ago, in 2011, the number was just 919.5 billion yuan, or 15.55 per cent of total sales.

Riding on the back of a historical bull run in last year’s property market, 133 developers made it to the list of companies registering revenue of more than 10 billion yuan, up from 104 in 2015, and just 37 in 2011.

National property sales surged 37.5 per cent in the first 11 months to 10.25 trillion yuan, compared with 5.9 trillion yuan in 2011, according to the National Bureau of Statistics.

Combined sales of those top 133 developers with annual revenue exceeding 10 billion yuan hit 5.7 trillion yuan, or more than half the market share.

“Consolidation is inevitable in China’s real estate market as the biggest players enjoy advantages in land acquisitions, financing, marketing and pricing power. We’ll also see increasing merger and acquisition activity in the field,” the academy’s report predicts.

Three developers – China Evergrande Group, China Vanke and Country Garden – joined the academy’s “super-league” of those with more than 300 billion yuan in revenue, followed by nine with annual sales of between 100 billion and 300 billion yuan.

In 2011, China Sunac, a Tianjin-based developer led by ambitious entrepreneur Sun Hongbin, was ranked eighteenth nationally with annual sales of 19.3 billion yuan. By last year its sales jumped to 150 billion yuan, climbing to seventh spot.

Li Zhanhong, vice-president of Newopen Group, a small-scale Chongqing-based developer, predicted an average 8,000 developers would leave the market annually from now on, and by 2020, the total number of Chinese developers would have shrunk to about 3,000, from the current 50,000.