Record high sales at Chinese developer Vanke, which unveiled ‘to survive’ slogan, in 2018
- Company generated 606.95 billion yuan in sales last year
- Main competitor Country Garden expected to retain top spot
China Vanke, mainland China’s second-largest property developer by sales, said on Friday it generated 606.95 billion yuan (US$88.28 billion) in sales last year, a record high for the company.
Vanke said contracted sales in December were up by 8 per cent compared with the previous month, generating 63.01 billion yuan, according to a filing with the Hong Kong stock exchange.
This pushed total contract sales at Vanke up by 14.54 per cent for 2018. Its total contract sales for 2017 stand at 529.88 billion yuan.
The company unveiled the slogan “to survive” during a two-day conference in Shenzhen in September 2018, amid concerns about “darkening skies over the country’s builders”. According to Vanke’s filing, it developed a further 22 new residential projects in 16 cities in December.
Securities firm China International Capital Corporation said in November sales of new homes could slide by 10 per cent in 2019. S&P Global Ratings, meanwhile, said the same month prices might fall by as much as 5 per cent. Also in November, brokerage CGS-CIMB Securities forecast a 10 per cent decline in prices and sales volumes.
Country Garden Holdings, Vanke’s main competitor, reported 12.14 billion yuan in sales attributed to shareholders for December, a 64.1 per cent drop when compared with November. When calculating the sales attributed to shareholders, the company factors in its share in all jointly developed projects.
This means Country Garden only books a certain percentage of sales in these projects, in line with the stake it owns in them. Sales attributed to shareholders by Country Garden for the whole of 2018 amounted to 501.88 billion yuan.
Data from consultancy China Real Estate Information suggests the total contract sales at Country Garden might stand at 728.69 billion, which will maintain its position as China’s largest property developer by sales.
The country’s property market is starting to soften after a long period of growth, forcing developers to adopt a number of marketing strategies to unload stock as soon as possible since late September.
In July, the Politburo, China’s top decision-making body, issued a stern statement after the housing market showed no signs of cooling.
It said increases in “home prices should be firmly curbed”. It removed the word “excessive” from the phrase, used in previous policy stances, showing that it was determined to control rapidly rising home prices.
China Evergrande, the other major developer, has not released its 2018 sales results yet.