Listed firms seek high yields in realty
Updated: 2016-10-19 08:51
By WU YIYAO(China Daily)
|
|||||||||
Potential homebuyers visit a housing expo in Chengdu, Sichuan province. [Photo provided to China Daily] |
Some 1,305 companies listed on the Shanghai and Shenzhen bourses-44 percent of all the A-share companies-have invested a combined 595.1 billion yuan ($88.32 billion) in real estate, as companies seek long-term and stable income, data from analysts revealed on Tuesday.
"For smaller A-share companies that are suffering from (economic) downward pressure, seeking profits and diversifying risks by investing in properties in first- and second-tier cities is a natural choice," said a research note from Sealand Securities Co.
DTZ East China analyst Shen Yun said the average return of Grade A properties in central Shanghai was about 4 percent, and the yield from residential properties could reach 7 percent or higher.
That compared with findings from Wind Information Co Ltd, a Shanghai-headquartered financial information services provider, whose data showed that companies in some sectors-such as cement, electrical component and the steel-related sectors-averaged earnings yields in the past three quarters of below 3 percent.
According to Wind Information, A-share companies have invested in real estate through directly buying properties, including commercial assets such as office buildings, and residential assets such as apartments, or purchasing equities from real estate developers to reap the rewards from fast-growing real estate prices in first- and second-tier cities.
Shenzhen Huicheng Electric Ltd said it plans to sell eight properties in Beijing, Nanjing, Wuhan and Fuzhou, in a deal that will bring in profits of 33.56 million yuan, turning the previous loss-making outlook for the third quarter into a guidance for profits for the quarter.
Analysts also said big financial institutions, such as insurers and banks, were also tapping into realty to leverage the huge amount of cash.
Among A-share insurers and banks, 12 had each invested more than 10 billion yuan in real estate, with Ping An Insurance (Group) Co of China Ltd heading the list. It had invested 33.43 billion yuan by the end of second quarter.
Related Stories
Capital flows moving from real estate 2016-10-11 07:39
Restrictive housing policy may fail to cool real estate market 2016-09-20 07:10
Real estate rules to differ more between cities 2016-09-08 14:28
Beijing real estate offers limited opportunities 2016-08-26 08:20
China to strengthen regulation on real estate agencies 2016-08-18 18:04
Today's Top News
Iraqi forces fighting all out to free Mosul from IS
Greeks rally against labor reforms
Chinese pupils flock to UK independent schools
Britain's May, faced with turmoil, agrees to a debate
'Zero Hunger Run' held in Rome
Xi: China considers Bangladesh important partner
Deals with Cambodia include energy, trade
Xi: Step up investment in emerging economies
Hot Topics
Lunar probe , China growth forecasts, Emission rules get tougher, China seen through 'colored lens', International board,
Editor's Picks
Hollywood snaps up rock star's dog film |
Chinese people welcome dispossessed |
The can-do generation to the fore |
Riding the wave |
Leisure giants buoy cruise market |
She followed her heart |