Real estate development has become a drag on corporate performance, prompting another listed company to announce its exit from the sector.
The list of companies withdrawing from real estate continues to grow. Recently, Zhuhai Zhumian Group (600185.SH) announced the transfer of its property subsidiary to fully pivot toward duty-free business and avoid further losses from its real estate segment. Similarly, Hong Kong China Travel Service (00308.HK) plans to divest its tourism-related property business, citing underperformance. Meanwhile, packaging industry leader Zijiang Enterprise, which has only developed a few projects, stated it would exit real estate after completing its current developments.
According to China Index Academy, since 2020, 12 companies have either exited real estate entirely or spun off their development businesses from listed entities—some retaining asset-light operations, while others shifting entirely to new ventures.
Liu Shui, Director of Corporate Research at China Index Academy, noted that companies are exiting real estate due to market downturns, where property losses directly hurt earnings. Additionally, divesting helps reduce debt, optimize financial structures, and lower credit risks. With low capital market valuations for real estate, exiting the sector may allow listed firms to redefine valuation logic and attract investors favoring stable cash flows and asset-light models.
**Zhuhai Zhumian Group Accelerates Full Exit from Real Estate** On October 21, Zhuhai Zhumian Group announced a major asset restructuring, transferring its 100% stake in Gree Real Estate Co., Ltd. to Zhuhai Toujie Holdings. This marks a critical step in its business transformation. Previously, the company operated duty-free consumer businesses alongside real estate. Post-transaction, it will focus solely on duty-free and consumer sectors.
Zhuhai Zhumian Group was rebranded from Gree Real Estate. In April, Gree Real Estate officially changed its name and stock ticker, completing a strategic shift toward duty-free operations. The transition began in 2020 when Gree Real Estate first explored duty-free business opportunities.
By December 31, 2024, Gree Real Estate completed a major asset swap, acquiring a 51% stake in Zhuhai Duty-Free Group while divesting five non-core property subsidiaries. It pledged to exit non-Zhuhai real estate projects and gradually wind down remaining property assets within five years.
The decision stemmed from Gree Real Estate’s declining performance. Sales fluctuated between below RMB 5 billion before 2019 and a peak of RMB 8.1 billion in 2020, only to drop to RMB 6.7 billion in 2023 amid industry downturns. Profitability also deteriorated, with gross margins falling from over 40% in 2018 to 21% by 2023, leading to a combined net loss of over RMB 2.7 billion in 2022–2023.
In 2024, losses persisted, with revenue dropping 24.59% year-on-year to RMB 5.277 billion and a net loss of RMB 1.515 billion, primarily due to lower property margins. Meanwhile, duty-free operations contributed over RMB 2.4 billion in revenue.
H1 2025 results showed continued property-related losses, with Gree Real Estate alone posting a RMB 336 million loss. Zhuhai Zhumian Group acknowledged ongoing challenges, including RMB 7.8 billion in real estate inventory, primarily in Zhuhai projects like Gree Coast and Ping Sha No. 9. The company aims to fulfill its five-year exit commitment by accelerating sales.
**A Shared Strategic Shift** Earlier, Hong Kong China Travel Service announced plans to spin off its tourism property business, including five key projects in Zhuhai, Xianyang, Anji, Shenzhen, and Chengdu. The move aims to reduce debt exposure and refocus on core tourism operations.
The property segment, once a pandemic-era lifeline, has since turned into a liability. From 2023 to H1 2025, the five projects incurred losses totaling HKD 461 million, HKD 239 million, and HKD 192 million, respectively.
Hong Kong China Travel Service cited capital intensity and cyclical risks in property development as key reasons for divestment. By exiting, it seeks to lower debt, mitigate market volatility, and concentrate resources on higher-margin tourism operations.
(Source: China Index Academy)
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