Country Garden Holdings was China’s top developer in 2018, as measured by sales contracts, maintaining its hold on the top spot for the second consecutive year in a year marked by consolidation among mainland developers.
The Guangdong-based builder chaired by peasant turned billionaire Yang Guoqiang reported RMB 728.69 billion in sales last year, for a year-on-year rise of 32.4 percent from the RMB 550.01 billion it sold in 2017, according to data from China Real Estate Information Corp (CRIC), a research unit of mainland brokerage E-House.
Country Garden’s growth came despite overall expansion of real estate sales of just 1.3 percent during 2018, according to figures from China’s National Bureau of Statistics, amid a policy-induced slow down in the country’s real estate market.
The report by CRIC shows the nation’s ten largest developers averaging 20 percent growth in contracted sales in 2018.
Top Five Ranks Stay Steady
China Vanke and Evergrande – both of which have held the top sales spot in previous years – placed second and third in the developer race with Vanke boosting its sales by 15.8 percent to total RMB 606.92 billion for the year and Evergrande placing third with RMB 551.1 billion in contracts, up 7.4 percent from its 2017 total.
While China’s top three, all of which hail from Guangdong, averaged more than 18.5 percent growth in contracted sales last year, the southern trio’s expansion pace fell well short of the 50 percent average sales growth the same top three contenders achieved in 2017.
Sunac, repeating its fourth-place finished from the previous year, had RMB 460 billion in sales, an increase of 27 percent from 2017’s RMB 362 billion in sales. In fifth place, Poly Real Estate had RMB 405 billion in sales, up 28.5 percent from RMB 315 billion in 2017, when it also finished fifth.
Greenland Group Takes Sixth Place
In sixth through 10th places in 2018 were Shanghai’s Greenland Group, China Overseas Land and Investment, Future Land Development Holdings, China Resources Land and Shimao Property Holdings respectively.
In 2017, the sixth through 10th places had been held by Greenland, China Overseas Properties, Longfor Property, China Fortune Land Development and China Resources Land, with Longfor and China Fortune Land getting pushed out of the top ranks after failing to keep pace with Future Land and Shimao.
Joining the RMB 100B Club
Despite a clampdown on mortgage lending and stricter enforcement of home purchase restrictions in the second half of 2018, 30 of China’s biggest developers achieved at least RMB 100 billion ($14.54 billion) mark in contracted sales last year, according to figures from CRIC.
That cohort of home-building giants jumped by more than 43 percent from the 17 who surpassed RMB 100 billion in sales in 2017, and was up by 60 percent from the 12 who achieved the milestone in 2016.
During the year, mainland China’s largest real estate developers sold 35 percent more housing by value than they had in 2017, according to the agency’s figures.
Top 10 Firms Claim Over a Quarter of the Market
The 2018 results brought into focus a years-long trend toward consolidation among mainland developers as the top 10 property firms accounted for 26.9 percent of total sales, the top 20 accounted for 37.5 percent of total sales, and the top 100 accounted for 66.7 percent of total sales.
In total, the top 10 developers accounted for just over RMB 4 trillion of contracted sales, an increase of approximately 20 percent from the RMB 3.23 trillion in sales notched by the ten largest builders in 2017.
Country Garden Builds Land Bank
In addition to selling the most homes last year, Country Garden has set itself up for growth in future years by being the most aggressive acquirer of new sites in 2018.
The developer spent a total of RMB 314.95 billion last year to acquire land, outspending Vanke, which was the second biggest purchaser of plots at RMB 268.66 billion in acquisitions, by approximately 15 percent. Sunac China placed third in the race to become China’s land king with RMB 203.31 billion in site purchases, with China Poly in fourth with RMB 183.48 billion and China Resources Land in fifth at RMB 126.24 billion.
Country Garden’s 2018 expenditures helped it add projects to its pipeline that could yield 129.43 million square metres of space worth an estimated at current sales prices to be worth RMB 998.73 billion in future sales.
Gains Expected to Slow in ’19
CRIC predicted that 2019 would be a year for milder gains for China’s developers, although it still said sales growth for the top 100 property firms would be between 20 percent to 30 percent. The monthly sales growth rate of the top 100 firms, it said, had fallen from 60 percent in July 2018 to just 21 percent in December as China’s “macroeconomic policy adjustments” – boosting support of the real economy while continuing a deleveraging drive – took hold.
Ding Zuyu, the CEO of E-House China, which produces the CRIC data, said he expects the number of property firms reaching RMB 100 billion in sales in 2019 to be between 30 and 35, the same or slightly more than the number of developers to achieve the milestone in 2018.