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Central SOEs to exit property market
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Centrally controlled state-owned enterprises have won a series of land bids with record prices this week in Beijing. In response to criticism that the central government-controlled firms are pushing up the price of land, the regulator, the State-owned Assets Supervision and Administration Commission, says nearly 80 companies whose core business is not property must gradually exit the real estate market.
According to the SOE regulator, there are 16 centrally controlled SOEs whose core business is real estate development. Data shows they have total assets of about 560 billion yuan, which makes up 85 percent of all the centrally controlled SOEs' assets in the property sector.
The 16 companies' sales revenue in 2009 was 190 billion yuan, making up 86 percent of the total revenue of the centrally-controlled SOEs' property sector.
The companies made nearly 19 billion yuan in profits during the period, making up 94 percent of all centrally-controlled SOEs property sector revenue.
The regulator's spokesman says centrally controlled SOEs must retreat gradually from the property business if it's not their main focus.
Du Yuanquan, Spokesman, State-Owned Assets Regulator, said, "Property companies that are holding stock-joint companies of the centrally-controlled SOEs should speed up the pace of adjustment and exit when the mission is achieved. The companies should obey the central government's policies on property development. "
Data shows centrally controlled SOEs sold properties worth 221 billion yuan in 2009, around five percent of the country's total sales revenue in the sector.
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