The golden era is over for mainland property and mergers and acquisitions will squeeze out less competitive players in the market over the next 15 years, the Hong Kong Economic Journal reported Wednesday, citing China Vanke Co. Ltd. (000002.CN) president Yu Liang.
Yu said property is no longer a lucrative business for all and Vanke will take a progressive, but cautiously optimistic approach.
He anticipates that the top 100 developers will account for 50 percent to 60 percent of the market with the rest scattered among 10,000 other developers.
But demand is expected to remain stable in the next 15 years thanks to urbanization, Yu said, adding that the residential segment will continue to be the company’s priority.
The country’s leading developer posted a 32.2 percent fall in sales and 5.2 drop in net profit for the first quarter year on year, with prices cut at some projects to compete with rivals.
Yu said the company is focusing more on project turnover rates rather than returns as it works to bolster cash flow.
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