Experts reported that financing activity among Chinese real estate companies has increased since the beginning of the year, but it remains irregular, and borrowing costs are still high.
According to Song Hongwei, research director at Tospur Real Estate Consulting, companies that succeed in securing financing are often state-owned enterprises or private firms with strong asset bases, and they typically use the funds to reinvest or repay debt.
Several notable deals have taken place in recent months:
- Huafa Real Estate issued private shares to raise 3 billion yuan to finance residential projects.
- Seazen Group issued 198 million shares to raise HK$60 million for development and debt repayment.
- Dalian Wanda Group issued bonds worth $360 million at an interest rate of 12.75%, marking its return to the offshore bond market after three years.
Song noted that the relatively high interest rate on Dalian Wanda’s bonds may attract higher-risk investors rather than traditional investors. Total financing for major real estate companies in China reached 24.1 billion yuan in December, bringing the annual total to 414.3 billion yuan — the lowest level on record — according to data from the China Real Estate Information Corporation.
Liu Shui of the China Index Academy confirmed that the sector is still undergoing deep adjustments, while financial institutions remain highly cautious about property investment, making improvements to the financing environment a short-term challenge.
