Residential land sales in Beijing have fallen flat

Finance | Bloomberg and Staff reporter 13 Oct 2021

Bloomberg and staff reporter

Property developers have applied for only 16 of 43 residential sites in the second batch of centralized land bidding in Beijing, meaning 60 percent of plots are in the cold.

Less than 30 companies participated in Beijing's land sales this time around, of among them state-owned developers such as China Overseas Land & Investment (0688) and China Resources Group have become the most active bidders.

The land market is also losing steam in Hangzhou, with the sale of 17 plots terminated due to a lack of valid applications in the second batch of a centralized selling operation.

By comparison, in January all four parcels in the eastern city were auctioned at the upper end of prices set by local authorities.

Mainland property developers are suffering credit rating downgrades at the fastest pace in five years as a recent slump in sales of new homes adds to concerns about the sector's debt woes.

Moody's Investors Service, Fitch Ratings and S&P Global Ratings have cut Chinese builders' ratings a combined 91 times through to September 30 - triple the number of this year's upgrades.

And that already has set a record for a full-year count of downgrades.

China Evergrande Group also remains in the spotlight, with some holders of dollar bonds with interest payments due Monday saying they had not received them during Asian business hours.

The latest payment uncertainties follow the embattled firm missing initial coupon deadlines for two other offshore bonds last month.

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