How bad is China’s real estate slump? For one of the country’s biggest real estate agencies, the eight-month-long slide in housing prices, and the fall off in deals that has accompanied it, means the end of its listing on the New York Stock Exchange.
According to a statement this week from IFM Investments, the China franchise holder for US real estate agency Century 21, the slide in value of the agency’s stock on the New York Stock Exchange (NYSE) has gotten the company booted from the prestigious financial market.
In the statement, IFM said the NYSE was delisting the company’s American Depository Shares (ADS) on the grounds that IFM’s market capitalisation had fallen below the NYSE’s continued listing standard of not less than $15 million for more than 30 consecutive trading days. Trading in IFM’s shares were suspended after the market close on January 2, 2015.
Century 21 Struggling After Deals Collapsed
The Chinese arm of the US house brokering giant lost its place on the exchange not only due to China’s eight month-long housing slump, but also because of its inability to pull off a last minute partnership that would have seen China’s biggest real estate portal invest $51 million for 20 percent of Century 21 China.
Although the proposed partnership, which would have seen the two companies cooperate on offering home financing and other services for Chinese clients, was only announced on October 7th, by November 3rd Soufun had already unveiled a similar partnership with one of Century 21’s biggest competitors.
By December 9th the Soufun/Century 21 deal foundered after Soufun was said to have failed to gain third-party consent required under the terms of the agreement.
The failure of the partnership sent IFM Investments shares down to as low as $0.58 after starting December at $1.36. By the time that the company was delisted its market capitalisation sat at $9.84 million – well below the $15 million minimum.
Real Estate Agency’s China Boss Says the Glass is Half Full
After getting kicked off the exchange, Century 21 China’s boss tried to put the best face possible on the situation.
“The delisting will not deter us from continuing to strive to achieve our Company’s goals. We are determined to grow our business by capitalizing on the significant opportunities in China’s real estate services industry,” Donald Zhang, chairman and chief executive officer of IFM Investments.
The company said it is in the process of applying for quotation of its shares on the OTCQX over-the-counter marketplace in the US. In the meantime, trading of the ADSs may continue to occur on the OTC Pink market.