China’s top three developers see sales slow in first quarter
Country Garden, Evergrande and Vanke head up list of top 100 developers, says leading research agency, with total Q1 sales rising 29pc to 1.95 trillion yuan
China’s “big three” developers continued to dominate the country’s home sales in the first quarter, according to a leading industry ranking.
But their sales momentum slowed considerably, with each enjoying mixed fortunes compared with the same time last year.
Country Garden, China’s largest developer in terms of 2017 sales value, continued to lead the market, according to China Real Estate Information Corp (CRIC) – a Shanghai-based marketing and research agency – with 187.8 billion yuan (US$29.9) worth in the first three months, a 29.3 per cent rise on a year ago.
China Evergrande Group ranked second with 161.8 billion yuan in sales, 51.4 per cent more than a year ago and the fastest growing of the three. While China Vanke ranking third, with its sales worth 152 billion yuan, growing just 1.6 per cent on-year, compared with a 98.9 per cent growth in the first quarter of 2017.
Looking broader at the top 100 Chinese developers, CRIC said sales growth across the board grew by 28.8 per cent over a year earlier, totalling 1.95 trillion yuan, compared with a 45.1 per cent growth recorded in the first two months.
“Most developers in the ranking realised less than 20 per cent of their whole-year sale targets in the first quarter,” said a commentary explaining the findings, “because they extensively rolled out projects in the final quarter, 2017, to hit annual targets, which reduced saleable numbers this quarter.
“Another reason is the continuing policy controls that made it difficult for developers to obtain pre-sale permits from [local] governments,” it added.
CRIC said it expected developers to accelerate their rolling out of new projects in the second and third quarters, this time to ensure they hit annual targets ahead of time.
All three firms sit on what are considered huge land banks, and the report suggested they remained in no great rush, however, to boost sales levels.
Evergrande has set a modest 550 billion yuan target for 2018, less than 10 per cent higher than its 2017 total contracted sales, while Country Garden and Vanke are yet to set theirs.
Further down the league, however, the report said competition should became much fiercer, particularly among those with annual sales of around 50-80 billion yuan, some of which have set ambitious growth targets of more than 40 per cent.
Fujian-based Ronshine Group, which registered annual contracted sales of 70.3 billion yuan last year, has set the table’s most aggressive growth target of 70.7 per cent, after acquiring 14.8 million square metres of new land over the past 12 months, which represents 64 per cent of its total developable area in reserve.
The report concluded, that for those seeking to join the “100 billion yuan annual sales club, speed is most important”.
