BEIJING – As the biggest property crisis in the nation dries up cash and revenue, China’s struggling real estate developers are flocked to a sector of the economy that they despised ten years ago.
A increasing number of real estate companies have switched from purchasing land and starting new projects to acting as contractors for construction projects.
Dozens of developers are engaged in competition, despite the industry’s significantly lower revenue than more conventional sources, from blue-chip powerhouse Country Garden Holdings to struggling Shimao Group Holdings.
In light of the industry-wide crackdown on excessive leverage, businesses are turning to contracting because they understand that the heyday of debt- and speculation-driven real estate development is over.
Some see prospects working with local government finance organisations who are holding land and need to hire professionals to handle the construction process.
The possibility of finishing abandoned housing projects for struggling developers also exists.
Since the issue that led to the massive China Evergrande Group’s default first surfaced in the second half of 2021, Mr. Li Jun, the CEO of Greentown Management Holdings, has experienced a sharp rise in activity.
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Source: TheStraitsTimes
