[photopress:real_estat_shanghai_nonesen.jpg,full,alignright] This is changing into a game for the well-stacked companies which can draw on serious reserves. Many of Shanghai’s small and medium-sized property developers are seeking to be merged or acquired because they do not have the capital and land reserves needed now that the government has released tightening policies to cool down the market.
According to statistics from the Shanghai United Asset and Equity Exchange (SUAEE), 13 real estate developers have registered to sell all or part of their stakes since the end of September, with the total reaching RMB720 million(US$96.51 million).
Mainly this is because you now need plenty of capitl — and, better still, a lot of land reserves — to stay in the game. Some small and medium-sized developers find it more difficult to get land from the government for business development, compared with the large State-owned developers. Again, this is understandable if not exactly praiseworthy.
Meanwhile, many large-scale real estate developers smell potential bargains in the air and are on the hunt for merger and acquisition (M&A) opportunities.
China Vanke bought a 50% stake in Shanghai Dijie Real Estate for RMB2 billion in September, after it had acquire three million sq m of land in Shanghai from other developers like Evergrande Real Estate Group.
Shanghai Industrial Holdings acquired a 19% stake in Shanghai Urban Development for RMB1.57 billion in October to become the company’s major shareholder.
Merger and acquiitions will increase in tempa as the goverment restrictions seriously start to bite.
Source: China Daily