China's Plan to Repurchase Idle Land Could Improve Developers' Liquidity -- Market Talk

Dow Jones2024-11-13

0425 GMT - China's plan to repurchase idle land from distressed developers could improve their liquidity and stabilize sales, CGS International analysts say in a research note. The Ministry of Natural Resources announced a program for local governments to acquire idle land from distressed developers via the issuance of special-purpose bonds last week. CGS views this a positive move and expects some acquisitions to start in 1Q when the idle land database is updated and the special bond funds are ready. They reckon that funding of CNY0.5 trillion-CNY1 trillion should be enough to ease developers' financial strain as that would translate into extra liquidity of CNY10 billion-CNY20 billion per developer, assuming 50 key distressed private developers participate in the program. CGS prefers state-owned developers, such as China Resources Land and China Overseas Land & Investment.(sherry.qin@wsj.com)

(END) Dow Jones Newswires

November 12, 2024 23:25 ET (04:25 GMT)

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CGS views this a positive move and expects some acquisitions to start in 1Q when the idle land database is updated and the special bond funds are ready. They reckon that funding of CNY0.5 trillion-CNY1 trillion should be enough to ease developers' financial strain as that would translate into extra liquidity of CNY10 billion-CNY20 billion per developer, assuming 50 key distressed private developers participate in the program. 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