Country Garden Loses Top Spot Among China Developers as Sales Fall 53%

Country Garden’s two-year reign as China’s biggest developer came crashing to earth in 2023 as the Guangdong-based builder’s contracted sales plunged 53.3 percent on the year to RMB 216.9 billion ($30.6 billion).

After knocking longtime champion China Evergrande out of the top spot in 2021 and maintaining the No.1 ranking in 2022, Country Garden slipped to sixth place last year, according to data provided by China Real Estate Information Corporation. Evergrande, meanwhile, ranked a lowly 24th, with the world’s most indebted developer chalking up RMB 60.3 billion in contracted sales.

State-owned enterprises continued to dominate the top 10 by holding seven spots (including all of the top five), led by Poly Real Estate, which claimed the No.1 ranking despite contracted sales dipping 7.2 percent to RMB 424.6 billion.

Rounding out the top five in 2023 were China Vanke (RMB 375.5 billion), China Overseas Land & Investment (RMB 309.8 billion), China Resources Land (RMB 307 billion) and China Merchants Shekou Industrial Zone Holdings (RMB 293.6 billion).

Spreading the Pain

Besides Country Garden, the other private developers in last year’s top 10 were Greentown China with RMB 194.3 billion, good for seventh place, and Longfor Group with RMB 173.6 billion, placing ninth.

Two SOEs, C&D Real Estate and Gemdale Corporation, took the eight and 10th spots with their respective contracted sales of RMB 189 billion and RMB 153.6 billion.

All told, contracted sales for the top 10 developers amounted to RMB 2.64 trillion, down 13.2 percent from 2022’s total. After Country Garden’s precipitous drop, state-controlled Gemdale saw the next-biggest decline at 30.8 percent, while Xiamen-based C&D enjoyed the biggest jump with 11 percent.

The 2023 list featured the same 10 developers as the year before, albeit reshuffled, with China Overseas Land & Investment and C&D moving up two places and Gemdale falling three ranks.

Fall From Grace

For Country Garden, clouds began to gather last August when the developer announced a first-half loss of RMB 48.9 billion ($6.7 billion) and acknowledged that “material uncertainties” threatened its ability to continue as a going concern.

The company confirmed that it had failed to adopt timely measures as China’s property market underwent upheaval and had not grasped the risks associated with its disproportionately large investment in third-, fourth- and lower-tier cities.

The writing may have been on the wall in July when chairwoman Yang Huiyan, the daughter of founder Yang Guoqiang, transferred 55 percent of her personal stake in Country Garden’s property management arm to a charity founded by her sister.

Country Garden went on to default on dollar bonds in October but managed to repay an RMB 800 million onshore note last month.