Private developers in China’s faltering property sector have increased sales of assets to state-owned enterprises (SOEs) despite easing measures introduced by the government, reports the South China Morning Post. Yuzhou Group Holdings, a Hong Kong-listed developer, announced a formal agreement with a unit of China Resources Mixc, which is controlled by state-owned China Resources Land, to offload its property management services company for RMB 1.06 billion ($168 million).
The announcement came after Yuzhou said the same day that its bond due in 2023 was suspended from Wednesday, as it had missed a coupon payment for the notes.
The increase in asset sales by private developers comes as their debt problems continue to drag on. The spillover to the financial markets has also been prolonged, as their bond and stock prices have slumped. These companies have been affected by tightened property regulations including the “three red lines,” which are thresholds on borrowing outlined by the central government in August 2020.