Companies Flee The Real Estate Sector Taking Billions With Them

Many businesses went into real estate development post-2008 in order to earn big and easy profits, but now they are beating a retreat as the profits disappear.

"From what we've monitored, this year real estate transactions are up at least 20% from last year, involving more than ¥10 billion," said an official from the China Beijing Equity Exchange.

China Beijing Equity Exchange is an equity transaction bourse and platform run by the government of Beijing for mergers, acquisitions and restructuring of state-owned enterprises.

Recently, a Sinopec subsidiary sold a 25.17% stake in a Henan developer, though it still holds ¥160 million yuan of the firm's debt.

So far in 2014, government companies including China Petroleum and Chemical Corp, China National Chemical Corp, and China Resources Gas Group in the petrochemical sector have all sold off real estate assets.

......In one of the largest divestments of real estate interests by a state-run firm this year, China Petroleum and Chemical Corp — also known as Sinopec — put up its 25.17 percent stake in Henan Huacheng Real Estate for sale, along with RMB163 million (US$26.3 million) in creditor’s rights on sale. While market estimates put the price of the equities at RMB 164 million yuan (US$26.4 million), Sinopec eventually sold its interest for RMB 145 million, an effective discount of 10 percent.

Asked to explain the reason for the subpar pricing, a staff member of Henan Huacheng pointed out that, “This project was transferred quickly because the SASAC long ago issued a decision that non-real estate companies cannot be involved in the property industry, and a petrochemical company is certainly not a real estate firm.”

According to CBEX, there has been more than ¥20 billion in real estate transactions on the exchange this year.

企业加速撤离房地产 超百亿资金出逃

As the property market continues to plumb the real estate industry lost the "profiteering" label, many companies involved in real estate investment began to gradually divest its real estate business.

"From our monitoring point of view, from the beginning of the year so far, the real estate industry is indeed an increase in the size of equity transactions, an increase of at least two percent last year, involving funding over ten billion." Beijing Equity Exchange, a person in charge told reporters .

Recently, Sinopec Group subsidiary will hold Henan Huacheng Real Estate Development Co., Ltd. (hereinafter referred to Henan Huacheng under) 25.17% stake to upset one yuan in Shanghai (real estate) United Assets and Equity Exchange listing to sell.

This is already Sinopec Group Company 3rd to 1 yuan reserve price listed for sale publicly held real estate equity. Henan 25.17% stake in Hwaseong together to sell, as well as the company more than 160 million yuan of debt.

In addition, by the end of August, Nanjing hundred new announcement that the future will focus on highlighting the main industry, and gradually withdraw from the real estate business. Previously, there blond Technology, Nanjing Hi-Tech, SJF and other listed companies expressed their support will focus on the main business, gradually stripping real estate business.

In addition, there are some companies listing to sell its real estate projects. According to statistics, in August just north of Exchange-listed real estate sector projects accounted for a third of all the listed items, in which more than 80% of the listed items are all non-corporate real estate industry.

Agency data show that in the first seven months of the frequent changes in ownership of the property market, the scale of equity trading has more than 60, the transaction value of the disclosure is also more than 20 billion.

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