Central China Real Estate to turn away from buying land and focus on projects demanding less investment

Central China Real Estate (CCRE), the biggest developer in Henan province, says it might stop buying land for some time and turn to asset-light projects with a focus on agency construction, under which the company executes projects for other developers with minimum investment.

The Hong Kong listed company, which has been investing in Henan for 24 years, has established its presence in Henan’s 18 prefecture-level cities and 23 county-level cities, and holds land reserves of 18.63 million square metres.

“In the past, China’s property developers were all-rounders, doing everything from financing and land buying to construction and property management,” said Hu Baosen, chairman of CCRE. “With the market getting mature and financing channels diversified, developers should focus on construction where they have the know-how.”

The developer has signed nearly 15 contracts for asset-light projects so far this year. Its target is 50 by the end of 2017.

CCRE’s property sales have hardly picked up in recent years amid a slowing economy and persistent oversupply problems in Henan. Its contracted sales rose slightly, by 1.2 per cent, to 15.7 billion yuan last year but missed the company’s overall sales target.

The company has now set its goal to transform from a traditional developer to a service provider.