China’s real estate developers have exploded onto the market in the last 5 years. From the humblest beginnings, they have risen to prominence inside China with ambitions to conquer territory around the globe. The three largest Chinese real estate developers include China Vanke Co Ltd, China Overseas Holdings Limited and Agile Property Holding Limited. Together these three combined for over $3 billion usd profit in 2010. Interestingly all three of the top Chinese Real Estate Developers are public companies but they are listed on domestic market. Foreign listed Developers include E-House China Holdings Limited, China Infrastructure Investment Corporation, Xinyuan Real Estate Co., Ltd, China Housing & Land Development, Inc and China Real Estate Information Corporation which is a real estate information firm and a subsidiary of E-House China. Together the foreign listed firms account for a relatively paltry $70 million usd (not including CRIC).
These developers derive funding from a variety of other domestic sources mainly. For example, domestic loans, deposits and fund raising account for 79% of all funding for real estate developers in China. This allows Chinese developers to build projects and designs that would not be approved of by foreign institutional investors. It also means that Chinese local real estate developers are very sensitive to government restrictions as they have few other options for funding. In 2010, Beijing Central Government made it difficult for developers to raise funds and borrow money. Immediately many well known developers turned to free flowing money in Hong Kong in an attempt to circumvent the new restrictions on the mainland.