NewChinese banks being tempted into residential leasing market
China Construction Bank first of country’s big four to make serious commitment, with others lining up to follow
China Construction Bank, China’s second-largest commercial bank by assets, has made its first foray into the country’s residential leasing market – a sector with solid state endorsement and which has already attracted surging interests from banks, developers and asset managers.
The lender’s Shenzhen branch has signed agreements with 11 developers, including majors China Vanke, Evergrande Group, China Merchants Property, to help it lease some 5,481 units of rental homes currently on the books. The new service will also provide tenants with loans to pay rent.
The specific terms, including average lease lengths and loan rates, have not been revealed, but according to Shenzhen Evening, a local newspaper, most the available properties will be wholesale provided to major Shenzhen company employees, including electric car maker BYD, China Fangda Group, the leading curtain wall manufacturer, and more than 70 tech firms.
“CCB has become the first of the “big four” state-owned banks to support the official policy of promoting the residential leasing market, which is being viewed as both a pilot and a benchmark for others to follow,” said Yan Yuejin, research director at the Shanghai-based E-house China R&D Institute.
China Citic Bank has already aligned with Country Garden, the second-largest developer in China, to offer a total of 30 billion yuan (US$4.52 billion) in credit over the next three years for the development of more rental-only flats.