Vi e w p o i n t | 29 Jan 2026 01:59:47 ET │ 13 pages China Property Three Red Lines to Ease but Unlikely to Leverage Up for Investment in ST CITI'S TAKE Policies pacing up: talk of easing "three red lines" — Property firms are no longer required to report "three red lines" indicators to authorities (Bloomberg, 29 Jan). We note the "three red lines" were implemented since Aug'2020 in an aim to limit debt and encourage sector deleveraging. Indeed, after the Qiushi Journal article (link) that set a supportive ...

19 January 2026 | 4:08PM CST Equity Research CHINA PROPERTY MONTHLY TRACKER Dec 2025 nationwide ASP decline persisted and primary sales declined -16%/-24% yoy by vol/value, sending FY25 sales vol/value -9%/-13% yoy (below GSe). New starts decline pace narrowed sequentially, sending full-year to -20% yoy (above GSe), while completion substantially undershot our estimates at -18% yoy, resulting in full-year at -18% (below GSe), and Dec FAI reached a new lowest level since 2012 (excl. Jan-Feb which are reporte ...

Core Insights - The Shanghai bulk trading market has experienced a continuous decline in transaction value for four consecutive years, with a reported total of 424 billion yuan in 2025, reflecting a year-on-year decrease of approximately 40% [1] - The fourth quarter of 2025 saw a further decline, with only 67 billion yuan in transactions, marking a 63% year-on-year drop and a 57% quarter-on-quarter decrease [1] Market Performance - The average transaction price in the Shanghai bulk market fell to approximately 5.6 billion yuan, with the fourth quarter dropping to 4.8 billion yuan [1] - More than 50% of transactions in 2025 were below 3 billion yuan, indicating a shift towards lower-value deals [1] Property Type Analysis - Office and research office properties remained the most popular, accounting for 185 billion yuan or 43.6% of the total market [2] - The commercial sector held a 16.6% transaction share, slightly higher than the apartment and residential sectors at 16.5% [2] - The hotel sector accounted for 5% of transactions, with notable deals including the "zero-dollar acquisition" of the Andaz Hotel in Shanghai [2][3] Buyer Composition - Domestic buyers dominated the market, accounting for 97% of transaction value, while foreign buyers completed only three acquisitions but sold assets totaling approximately 129 billion yuan [3] - Self-use buyers emerged as a significant market force, contributing around 60 billion yuan or 26% of total transactions, primarily from sectors like finance, TMT, and consumer [7] Market Trends and Future Outlook - The market is witnessing an increase in judicial auction transactions, which accounted for a quarter of total deals, reflecting underlying debt pressures on certain assets [7] - There are currently 140 billion yuan in bulk transactions at the draft stage, expected to close in the first half of 2026, with a focus on stable, smaller-scale transactions [8] - The expansion of public REITs in sectors like hotels and quality office spaces is anticipated to enhance exit and revitalization channels for existing assets in 2026 [8]

Vi e w p o i n t | 15 Dec 2025 02:56:30 ET │ 15 pages China Property Nov NBS: Sharpest-ever Investment Drop; Time Needed to Stabilize CITI'S TAKE Nov NBS: weakness on all fronts; REI -30%yoy, a record-high — Nov-alone: [1] REI -30.3%yoy (Oct: -22.5%), the sharpest drop on record, with REI of Rmb0.5trn a monthly low since Apr-2012 (excl. CNY); [2] Completion -26%yoy (Oct: -28%); [3] Starts -28%yoy (Oct -29%); [4] Residential sales -28% (Oct: -25%), largest single month drop since May'24; resi GFA sold -19% ( ...

Summary of China Property Monthly Tracker Industry Overview - The report focuses on the **Chinese property market**, highlighting significant declines in various metrics such as average selling prices (ASP), primary sales, new starts, and completions in November 2025 compared to previous years. Key Market Indicators - **Primary Sales**: - Volume declined by **17%** year-over-year (yoy) - Value declined by **25%** yoy, which was largely in line with expectations [2][11] - **New Starts**: - Fell sharply by **28%** yoy, marking the second consecutive month of decline [11] - **Completions**: - Declined by **25%** yoy, undershooting estimates [11] - **Fixed Asset Investment (FAI)**: - Reached its lowest level since 2012, declining by **30%** yoy [2][11] - **Secondary Transaction Volumes**: - Decreased by **24%** yoy [2][11] Price Trends - **Average Selling Prices (ASP)**: - Nationwide ASP declined by **9.5%** yoy in November [21] - Primary market ASP showed a slight decline of **0.4%** month-over-month (mom), while secondary market ASP declined by **0.7%** mom [11][28] Developer Activity - Developers' land acquisition spending moderated to **21%** of contract sales in November, with an average project-level gross profit margin (GPM) of **25%** [12][71] - The land market showed signs of weakness, with land sales volume and value declining by **27%** and **37%** yoy, respectively [35] Future Expectations - For December 2025, expectations include: - Continued price weakness and a **low-teens to low-twenties %** yoy decline in sales volume and value [3][13] - A potential positive yoy for completions, but a steeper decline in new starts [3][13] - Secondary transaction volumes expected to decline by **high-twenties %** yoy [3][13] Policy and Market Sentiment - Key areas to watch include: - Potential large-scale mortgage interest subsidies and commercial mortgage rate cuts [4][8] - Removal of housing purchase restrictions in core districts of Tier-1 cities [4][8] - Signs of rent stabilization in high-tier cities [4][8] - The overall demand score for the property market was **37 out of 100**, indicating a challenging environment for developers and homebuyers [53][55] Developer Liquidity - Developers are facing a funding gap estimated at **Rmb3.2 trillion** for 2025, with liquidity remaining tight [54][57] - New funding sources for developers increased by **21%** mom and **29%** yoy in November, indicating some recovery in financing [63] Conclusion - The Chinese property market is experiencing significant challenges, with declining sales, prices, and construction activity. Developers are under pressure due to liquidity issues and a challenging market environment. Future policy measures and market sentiment will be crucial in determining the trajectory of the market moving forward.

Core Insights - The best investment of Howie Mandel is a commercial property that he rents out to creative and tech companies, which he considers a good investment from both real estate and career perspectives [2] - Mandel has built a significant real estate portfolio, particularly in Las Vegas, where he initially invested in warehouses before shifting focus to gas stations [3][4] Real Estate Investment Strategy - Mandel began investing in Las Vegas during the 1980s, capitalizing on the rapid growth of the area and the tax benefits of Nevada [4] - He identified opportunities in commercial real estate by purchasing land in areas that were set to develop, particularly where home developers were buying land for residential projects [5][6] Gas Station Business - The gas station business became a major component of Mandel's investment strategy, as he recognized the need for services in newly developed residential areas [3][6] - He strategically built gas stations and accompanying retail spaces, such as strip malls and convenience stores, to serve the growing population in these neighborhoods [7]

Summary of Key Points from the Conference Call Industry Overview - **China Residential Market**: Developers are increasingly negative due to accelerated price declines, leading to margin and earnings pressure in 2025 and 2026. BEKE anticipates a 30% YoY decline in existing home GTV in Q4 2025 and a 13% and 6% decline in existing and new home transaction GTV in 2026 respectively [2][19]. - **Hong Kong Residential Market**: Developers report a strong recovery in transaction volume driven by rate cuts, rising rental demand, and increased investment from mainland Chinese buyers. There is potential for gradual price increases in new project launches [3]. - **Retail Sector**: High-end malls in China and Hong Kong are experiencing better momentum in 2H25, attributed to positive wealth effects from stock markets and rising gold prices. However, mass market retail remains challenging due to consumption downgrades and e-commerce penetration [4]. - **Office Market in Hong Kong**: There are signs of recovery in the Central office market, driven by increased leasing inquiries from the financial sector and IPO-related services [5]. Company-Specific Insights - **CR Land**: Reported a 17% YoY decline in contract sales gross value to Rmb170bn and expects downward pressure on earnings in 2025 due to lack of one-off gains [8]. - **COLI**: Experienced a 21% YoY decline in contract sales gross value to Rmb189bn, with expectations of launching large projects to mitigate sales decline [9]. - **Greentown China**: Reported a 6% YoY decline in contract sales to Rmb120bn, with expectations of slight profit in 2025 but continued pressure from vintage inventory [10]. - **Poly Developments**: Focused on liquidity and destocking, with a significant portion of sales coming from vintage inventory [11]. - **CR Mixc**: Forecasted double-digit core net profit growth for FY2025, supported by strong same-store sales growth [15]. - **Beike (KE Holdings)**: Expects a 30% YoY decline in GTV for existing homes in Q4 2025, but maintains a guidance of Rmb7bn adjusted operating profit for 2026 [19][20]. Market Preferences - **Stock Preferences**: Preference for HK developers like Henderson and Sino due to the bottoming of the HK residential market, and for retail properties like CR Mixc and Swire Properties due to recovery in mainland China retail [6]. Risks and Valuation - **Valuation Methods**: P/BV methods are used for mainland China property developers, while discount to NAV is used for Hong Kong developers and landlords [31]. - **Key Risks**: For Hong Kong, risks include weakening macroeconomic conditions and increased housing supply. For mainland China, risks involve government policies restricting demand and tight financing for developers [32]. Additional Insights - **Market Sentiment**: There is a cautious optimism among developers in Hong Kong regarding sales momentum and potential price increases, while mainland developers face significant challenges due to declining sales and margins [3][4][5][8][9][10][11].

Summary of China Property Monthly Tracker Industry Overview - The report focuses on the **Chinese property market**, highlighting significant declines in new property starts, sales, and construction activities, indicating a downturn in the sector. Key Points Market Performance - **New starts** in October 2025 fell to the lowest monthly level (excluding January and February) since the current downturn began [2][9] - **Primary sales** volume and value declined by **19%** and **24%** year-over-year (YoY), respectively, while construction activities (completion and new starts) plunged nearly **30%** YoY [2][9] - **Secondary sales volume** also fell short of expectations, contributing to a broader weakening in market sentiment and income expectations [2][9] Price Trends - The **average selling price (ASP)** for properties continued to decline, with primary ASPs down **0.5%** month-over-month (MoM) and secondary ASPs down **0.7%** MoM in October [9][31] - The **ASP** in tier-1 cities showed a **0.3%** decline for primary and **0.9%** for secondary markets, indicating a divergence in pricing trends [9][31] Future Expectations - For November 2025, expectations include: 1. Continued price weakness, especially in secondary ASPs across all cities [3][11] 2. An expansion in the YoY decline for primary transaction volume and value, with new starts remaining weak [3][11] 3. A narrowing trend in secondary transaction volume YoY, but still recording substantial declines [3][11] 4. A further decline in land sales volume and a potential negative YoY change in land sales value [3][11] Developer Insights - Developers' land acquisition profitability improved slightly month-over-month in October, with land acquisition spending averaging **28%** of contract sales, down from **54%** in September [2][10] - The report notes that developers are likely to be less aggressive in land banking for the remainder of the year, having largely met their full-year land replenishment plans [18][10] Government Policies and Market Sentiment - The report highlights ongoing discussions regarding the removal of housing purchase restrictions in core districts of tier-1 cities, which could positively impact home purchases [4][10] - There is a noted deterioration in the demand-side strength score, which dropped to **37 out of 100**, indicating a challenging environment for home purchases and secondary market performance [53][55] Construction and Investment Trends - Construction activities are expected to see a high single-digit percentage decline YoY for completions and a **30-40%** decline for new starts in November [17][11] - Developers are expected to focus on smaller projects with better ASP visibility and easier product positioning, rather than larger land parcels requiring phased development [18][10] Financial Metrics - The report provides a detailed summary of key market indicators, including: - **GFA sold**: **61 million sqm** in October, down **18.8%** YoY - **Property sales**: **Rmb 0.6 trillion**, down **24.3%** YoY - **ASP**: **Rmb 9,723/sqm**, down **6.8%** YoY - **New starts**: **37 million sqm**, down **29.5%** YoY - **Completions**: **37 million sqm**, down **28.2%** YoY [20][29] Conclusion - The Chinese property market is experiencing significant challenges, with declining sales, construction activities, and prices. The outlook for November remains cautious, with expectations of continued weakness in both primary and secondary markets. Developers are adjusting their strategies in response to market conditions, and government policies may play a crucial role in shaping future demand.

Core Viewpoint - The US Federal Reserve's recent interest rate cut is expected to initiate a cycle of policy easing, potentially increasing global property investments, although the impact on mainland China and Hong Kong may be limited due to fundamental and geopolitical challenges [1][5]. Group 1: Interest Rate Cuts and Investment Trends - Analysts predict that the Fed's quarter-point rate reduction will likely lead to a series of further cuts, encouraging capital to flow back into property investments [2]. - The Federal Reserve reduced its target rate by 25 basis points to a range of 4 to 4.25 percent, marking the beginning of a rate-cut cycle anticipated to continue into the next year [5]. - The Hong Kong Monetary Authority followed suit, lowering its base rate by a quarter point to 4.5 percent, the lowest level since December 2022 [7]. Group 2: Market Competitiveness and Investment Focus - JLL's global bid intensity index showed an increase in the third quarter, indicating a resurgence in competitive bidding for property investments after a challenging second quarter [3]. - Investors are currently focusing on various segments, including residential or multi-housing, industrial and logistics, retail, and prime offices in key gateway cities [4]. - Further interest rate cuts are expected to bolster investment activity in commercial property markets by lowering financing costs and the benchmark for institutional investments [6].

Core Insights - The REIT sector is experiencing improvement due to moderating interest rates and declining inflation, with several REITs making acquisitions to enhance their asset base and increase distributions for investors [1] Group 1: CapitaLand Ascott Trust (CLAS) - CLAS is Asia-Pacific's largest lodging trust with total assets of S$8.8 billion and a portfolio of 101 properties across 16 countries [2] - CLAS has acquired three freehold rental housing properties in Japan for JPY 4 billion (approximately S$34.2 million), located in Osaka and Kyoto [2] - The projected net operating income (NOI) entry yield for this acquisition is 4%, significantly higher than the exit NOI yield of 0.4% from a previous divestment [3] - The acquisition is expected to result in a 0.3% accretion to CLAS's distribution per stapled security (DPSS) [3] - The properties have an average occupancy of 97% and will contribute to a stable income stream, with rents in Osaka and Kyoto expected to rise by 10% to 15% over the next five years [4][5] Group 2: AIMS APAC REIT (AAREIT) - AAREIT, an industrial REIT, is acquiring Framework Building for approximately S$56.65 million, projected to have an initial net property income (NPI) yield of 8.1% [6] - The acquisition is expected to add 2.5% to AAREIT's distribution per unit (DPU) if fully funded by debt [6] - The property has a total net lettable area of 16,082 square meters and is 97% occupied, with potential for value-add enhancements [7][8] Group 3: CapitaLand Integrated Commercial Trust (CICT) - CICT is acquiring 55% of the commercial component of CapitaSpring for S$1.05 billion, with an entry yield in the low-4% region [9] - The total acquisition outlay is approximately S$482.3 million, funded through a private placement of units, expected to result in a 1.1% DPU accretion [10] - Following the acquisition, CICT's pro-forma aggregate leverage is expected to rise slightly from 37.9% to 38.3% [10] Group 4: United Hampshire US REIT (UHREIT) - UHREIT owns a diversified portfolio valued at around US$731 million and recently purchased Dover Marketplace for approximately US$16.4 million, below independent valuation [11] - The acquisition is fully funded by proceeds from a previous divestment and is expected to provide a 2% uplift to UHREIT's DPU [12] - Dover Marketplace has a committed occupancy of 96.1% and a long weighted average lease expiry of 9.7 years [12]