23 May 2019

BBMG to reap the urbanization dividend

China’s first-ever Central Urbanization Work Conference, held in Beijing last week, has laid out some far-reaching guidelines on urban planning going forward. To enhance the population bearing capacity, cities are required to reduce the area for industrial purposes. Meanwhile, supply of residential land should be increased through rezoning.

These initiatives will benefit some key players in the real estate sector in major cities. One firm that is particularly well placed to reap the dividends is Beijing-based BBMG Corp. (02009.HK).

BBMG is a vertically integrated real estate developer focusing on the Greater Beijing Region. The company has built up strengths in almost all aspects of the property development chain, from supplying building materials and cement to undertaking construction and real estate management.

Due to historical reasons, the state-owned enterprise retains a number of factories and mines in and around Beijing. The assets were obtained at very low cost in the past. As the capital city is now determined to tackle the hazardous air pollution, BBMG needs to relocate some production facilities, which will help the company unlock the true value of its huge land assets.

According to Shanghai Securities News, BBMG has nearly one million mu, or 66,667 hectares, of industrial land. Under existing regulations, rezoning of the land reserves is subject to stringent restrictions. But the legal and policy obstacles will end soon as Beijing desperately needs more land to boost housing supply quickly amid the urbanization push.

Given this situation, it is no wonder that BBMG’s chairman Jiang Wei-ping {蔣衛平} was very upbeat about the prospects for residential property development next year, the Securities News noted.

– Contact the writer at [email protected]



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