At present, there are lots of small companies in the decentralized real estate market. Even the China National Real Estate Development Group, which has property of RMB60 billion, an immense amount, is not as big as the equivalent in industrialized nations.
Analysts, Heading Century, believe that a way out is big real estate company taking over small ones to optimise and integrate market resources. Costs will be brought down and leading, larger companies formed.
Heading Century sees a number of likely moves:
Integration between big companies and smaller ones. Some small real estate developers are short of capital though they hold land which they have been hoarding. Such developers relinquish or transfer their projects and Heading Century believes that the most common result will be for the small company to be partnered or absorbed by a big one.
Foreign real estate companies with enough capital, favorable finance-seeking channels, and well-established managerial experience will take over some of their China counterparts.
Mergers and acquisitions will help foreign companies participate in China’s real estate industry.
Source: China Market Information Center