In recent days, four state-owned asset companies in Shandong province are actively selling a large number of properties, commercial shops, and parking spaces, with a total value reaching millions of yuan. Industry analysts pointed out that this move is a response by local state-owned enterprises to the pressures of liquidity and debt repayment, aimed at quickly regaining funds.
According to a report by the “Daily Economic News”, a variety of property types have been listed for sale, ranging from brand new residential properties to old storefronts that have been vacant for years. Searching on the Shandong Property Trading Center website for “Yantai Yedaguo International Talent Group Co., Ltd.”, it was found that the company has dozens of properties and accompanying parking spaces in Yantai’s Ruixi and Lecheng residential areas, as well as in the agricultural market, listed for transfer with deadlines ranging from September 12 to 18.
Among them, the eight properties in the Lecheng residential area are listed with a total price of 16.468 million yuan. Each property requires a deposit of over half a million yuan for registration, with complete property rights certificates, and the transfer requirement is “one-time payment”.
On September 12, a spokesperson for Yantai Yedaguo International Talent Group Co., Ltd. stated: “The company bought a residential building from a developer, and is now disposing of a portion of the properties as idle assets.”
Yantai Yeda City Development Group Co., Ltd. is transferring 98 residential properties in the sunrise area of Yantai Economic Development Zone, as well as some street-front commercial shops, with prices per residential unit around 700,000 yuan, and a few unit types priced around 400,000 yuan.
Linqing Zhongzhou Investment is also transferring 20 sets of courtyard houses in the Wulizhuang area of Linqing City, with each property listed at around 600,000 yuan. An individual from Zhongzhou Investment Operations Group Co., Ltd. stated that the shops being transferred did not obtain property certificates, had been vacant for over ten years, hence the decision to publicly list them for sale.
Furthermore, Zibo High-tech Industry Investment Co., Ltd. is transferring buildings, structures, and land use rights within the Tianjin Provence Industrial Park, with a minimum price of around 174 million yuan.
All the aforementioned companies are local state-owned enterprises.
Are the qualities of the properties being concentrated for transfer by these state-owned enterprises guaranteed? Industry insiders believe that the property rights disposed of by local state-owned enterprises have clear ownership, and require completion of property rights confirmation, evaluation, and system registration, minimizing the probability of property disputes. However, the transaction process for these properties is long, with most of the properties being sold “as-is, without lease agreements” or “with lease agreements without guaranteed lease expiration”. Renovation and maintenance costs need to be borne by the buyer. The properties are “secured but with visible flaws”, prospective buyers need to do thorough due diligence, understand tax fees and lease agreements before deciding to make a purchase.
A staff member from the Shandong Property Trading Center mentioned that state-owned assets like these need to provide materials in accordance with relevant policies, and undergo scrutiny before being publicly listed. After the transfer, there will be dedicated personnel to facilitate the signing of the transfer contract between the transferor and the transferee.
Bai Wenxi, Vice Chairman of the China Enterprise Capital Alliance, pointed out that the collective sale of properties by local state-owned enterprises is not coincidental. Faced with the dual pressures of declining real estate market and the “debt-for-equity” tasks assigned by local governments, these enterprises are experiencing a sudden increase in short-term debt repayment pressures. Selling existing properties is an important means for them to replenish cash flow in the short term, to address mature debts, and to ensure the expenditures for infrastructure and livelihood projects.
The annual report of Yantai Yeda City Development’s bond in 2024 shows that the company achieved an operating income of 3.629 billion yuan, a decrease of 534 million yuan year over year, with a net profit of approximately 201 million yuan, an increase of 24 million yuan year over year. As of the end of 2024, the company’s total monetary funds amounted to 1.471 billion yuan, while its short-term liabilities reached 3.594 billion yuan.
Prior to this recent wave of property sales by Shandong state-owned enterprises, in June last year, the number of second-hand properties listed by state-owned enterprises on the Guangzhou Property Trading Exchange reached 183 sets, setting a new monthly peak for the year. These properties involved 17 state-owned enterprises.
In September 2023, the Beijing Chaoyang District Housing and Urban-Rural Development Commission announced the transfer of 154 residential units.
This reflects that in the current economic environment, local governments and their affiliated enterprises are generally facing financial and funding challenges, actively seeking asset disposals to cope with the dilemma.