Market share of top 100 real estate companies reaches 61.5% in 2019

Market share of the top 100 real estate companies in China reached 61.5 percent in 2019, up 5.2 percentage points year-on-year, which suggests continuing concentration of the property industry in the Chinese market, a report showed.

Sales of the top 100 property companies increased by 16.3 percent to reach 9.82 trillion yuan ($1.4 trillion) last year, while the sales area grew 13.5 percent to 724 million square meters, according to a report released by China Real Estate Top 10 Research on Tuesday.

Average revenue and net profit of the top 100 enterprises reached 54.64 billion yuan and 6.9 billion yuan in 2019, respectively, up 24.2 percent and 19.5 percent year-on-year. However growth slowed down compared with 2018 – down 11.6 percentage points and 20.4 percentage points, respectively.

The report said the increase in operational cost and decline in the sales premium rate led to the shrinkage of profitability. The net profit rate of the top 100 real estate companies saw a year-on-year decline of 0.5 percent in 2019, while the average return on equity dropped by 0.8 percent, as influenced by the regulations, rising costs and decreasing turnover velocity, it showed.

Property operators have been taking measures to improve profitability, such as optimizing financing, enhancing cost control and adopting multiple methods when purchasing land. However, they still face great pressure in a low profit margin in the future, according to the report.

The average asset-liability ratio of the top 100 companies reached 78.7 percent last year, up 0.2 percentage points than in 2018, with a decrease in issuance of domestic credit debt and medium-term notes, and growth in corporate bonds and foreign bonds, it showed.

The report said competition in the property sector will focus more on comprehensive capability in products and operation.