A formal announcement from China Vanke Co.,Ltd. marked the retirement of Yu Liang, a core figure who had served the company for 36 years, from his positions as director and executive vice president, signaling the end of an era. During Yu Liang's tenure, he was a strong proponent of listing long-term rental apartments as one of Vanke's core operational businesses. He repeatedly set the strategic direction for the long-term rental apartment segment, candidly stating that "long-term rental apartments cannot generate huge profits, but they must be done," while also reflecting that the "sub-landlord model had cost Vanke significantly" in specific operations. Coinciding with this executive change, Vanke's long-term rental apartment brand "Po Yu" (泊寓) has been embroiled in controversy, with large-scale tenant evictions occurring in multiple cities including Shenzhen, Wuhan, and Hangzhou. According to reports from numerous tenants, they were required to vacate their apartments without the legally mandated 30-day notice, with Po Yu offering alternatives such as relocation to other properties, contract re-signing, or compensation for lease termination. The evictions point to rental payment disputes between Vanke and the property owners. Some landlords claim they signed long-term management contracts lasting up to 12 years with Vanke subsidiaries, but have recently faced overdue rent payments exceeding 100,000 yuan, and were required to sign termination agreements before applying for the payment of the arrears. A source close to Vanke's Shenzhen operations stated that a small number of buildings are experiencing temporary deferred payments, but the company has developed solutions and repayment plans, is communicating with property owners, and will gradually coordinate to resolve the issues. Landlords have exposed Vanke's rent arrears, leading to tenant evictions. In early December of last year, a landlord for a Vanke Po Yu property posted on social media that they received a lease termination notice. Vanke reportedly required the landlord to first sign a termination agreement, transfer the security deposit to Vanke's account, and only then apply for the payment of the overdue rent. Additionally, Vanke requested the landlord to waive one month's rent to facilitate Po Yu's exit. The landlord revealed that they had signed a 12-year lease contract with a Vanke subsidiary, entrusting their property to Vanke for long-term rental apartment operation, and received the termination notice with six years still remaining on the contract. The landlord stated that Vanke, as the operator, had paid a one-month security deposit, but had accumulated rent arrears for up to three months, totaling over 100,000 yuan. In 2024, Vanke had proposed a rent reduction request, lowering the rent per square meter by approximately 10 to 30 yuan. The situation of landlords being owed rent is not an isolated case. Against this backdrop, many Po Yu tenants reported suddenly receiving notices requiring them to move out. The evictions reportedly cover Po Yu locations in cities like Shenzhen, Wuhan, and Hangzhou, with significant impact in Shenzhen, where Vanke is headquartered; tenants in properties like Longhua Qinghong Gongshe, Changfa New Village, and Shawan Gongshe have received eviction notices. One Po Yu tenant stated, "We received the notice on the 16th and were told to vacate by the 31st. A closure notice was posted downstairs in the apartment building, and I heard that Vanke-related companies Wan Cun and Po Yu owe over 2 million yuan." Another tenant mentioned, "Po Yu notified us that it was due to the operating contract with the landlord expiring, and the property needed to be returned to the landlord for management. Po Yu provided several relocation options: one, free relocation to another Po Yu location with moving costs covered by the property and one month's rent waived; two, maintain the status quo by re-signing a contract directly with the landlord; or three, directly terminate the lease with a refund of the security deposit and any prepaid rent." Regarding breach of contract penalties, some tenants noted that according to their contracts, if Po Yu is unable to continue renting the unit during the service period, it should provide 30 days' notice and compensate with one month's rent as a penalty. It is understood that many tenants who have already vacated or re-signed with landlords have received compensation. Regarding the incidents of Po Yu's rent arrears to landlords and tenant evictions, a source close to Shenzhen Vanke reiterated that currently a small number of buildings have temporary payment deferrals, the company has formulated solutions and repayment plans, is communicating with owners, and will gradually resolve the issues. The aforementioned landlord also stated that Vanke had revised the provided agreement, removing the requirement to refund the security deposit first, and they have now received all outstanding payments from Vanke. Scale contracted by tens of thousands of units, cutting losses on high-cost properties. The rental residential business was a star venture for Vanke in exploring transformation and seeking new growth avenues. As early as 2016, Vanke formally launched the "Po Yu" brand by consolidating its various long-term rental apartment projects, upgrading it to one of the group's core main businesses in 2018 and establishing an independent division. Financial report data shows that as of the end of December 2025, Po Yu managed a portfolio of 269,000 rental units, a decrease of 11,000 units from the 280,000 units at the end of September, with 203,000 units already operational. Against the backdrop of a sharp decline in real estate development, Vanke's rental residential business maintained stable scale expansion and revenue growth. From 2022 to 2024, Vanke's rental residential revenue was 3.24 billion yuan, 3.46 billion yuan, and 3.702 billion yuan respectively. Furthermore, the Po Yu business achieved overall profitability for the first time in 2023 under the cost method. However, the long-term rental apartment industry itself is characterized by long cycles and low margins. More importantly, compared to Vanke's overall revenue, Po Yu's contribution remains minimal. In the first three quarters of 2025, Vanke's rental residential business revenue was 2.74 billion yuan, a year-on-year increase of 4.4%, accounting for less than 2% of total revenue. Vanke is currently experiencing unprecedented operational difficulties. In the first three quarters of 2025, Vanke achieved revenue of 161.39 billion yuan, a year-on-year decrease of 26.61%, with a net loss attributable to shareholders of 28.016 billion yuan, a decrease of 56.14% year-on-year. The net cash flow from operating activities was -5.889 billion yuan, a decrease of 21.49% year-on-year. Even more pressing is the debt pressure. As of the end of September 2025, Vanke's total interest-bearing debt was 362.93 billion yuan, of which short-term borrowings and non-current liabilities due within one year amounted to approximately 151.4 billion yuan. Meanwhile, the cash and cash equivalents on the company's books stood at 65.68 billion yuan, indicating a funding gap exceeding 85 billion yuan. For Vanke today, cash flow is the scarcest resource. Although the Po Yu business is operationally healthy, its sub-landlord model requires continuous rental payments to property owners, representing a significant cash outflow. Terminating contracts for some high-cost, low-yield properties, while painful, allows for quicker loss mitigation. It has been noted that many of the Po Yu locations facing evictions in Shenzhen are buildings in urban villages. In 2017, Vanke launched the "Wan Cun Plan" (万村计划), signing contracts directly with urban village landlords to rent entire buildings or blocks, which were then uniformly renovated before being re-rented. However, due to high renovation costs, long payback periods, and market uncertainties, the plan was suspended for new signings at the end of 2018, with some already contracted properties being abandoned. An industry insider stated that during 2016-2017, a massive influx of capital into the long-term rental apartment sector led companies to aggressively compete for properties by offering rents far exceeding market rates to rapidly expand their portfolios. The aforementioned landlord mentioned that their property has now been re-entrusted to a new "sub-landlord" for operation, but admitted, "The rent is certainly less than what Vanke paid; it's several thousand yuan cheaper per month." Debt extension efforts face repeated setbacks, grace periods approach. Confronted with an unprecedented debt crisis, Vanke is attempting to raise liquidity through multiple measures including shareholder loans, debt extensions, asset collateralization, and sales. However, support from its most important "lifeline," the largest shareholder Shenzhen Metro Group Co., Ltd. ("Shenzhen Metro"), appears to be waning. Public information shows that as of November 2025, Shenzhen Metro had provided cumulative loans exceeding 30 billion yuan to Vanke at interest rates significantly below market levels. However, according to a loan framework agreement signed in November 2025, the remaining available loan quota from Shenzhen Metro before June 30, 2026, is only 2.29 billion yuan, and all new loans require Vanke to provide collateral or pledges, marking the end of the "unlimited输血 (blood transfusion)" model. Furthermore, Vanke's current debt negotiation progress has repeatedly encountered obstacles. After consecutive rounds of proposal adjustments and meeting negotiations, an agreement with major creditors has yet to be reached. At the end of 2025, extension proposals for two Vanke medium-term notes – "22 Vanke MTN004" (issuance amount 2 billion yuan, principal due December 15, 2025) and "22 Vanke MTN005" (issuance amount 3.7 billion yuan, principal due December 28, 2025) – were successively defeated in bondholder meetings. Although Vanke made some adjustments to the proposals, such as promising credit enhancement measures for "22 Vanke MTN004" and committing to pay due interest during the grace period, the core proposal to extend the principal repayment by 12 months was rejected as the affirmative votes failed to reach the 90% threshold required for passage. In the race against time, Vanke's window for communication with creditors is narrowing. According to the latest announcement, another bondholder meeting for the aforementioned two bonds is scheduled for January 21, 2026. The timing of this meeting is critical, as both bonds have entered a 30-trading-day grace period, which will expire on January 28, 2026. This means the January 21st meeting occurs just one week before the final deadline, representing Vanke's crucial attempt to avoid a default in the public market.
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