Aug 10, 2020 08:52 PM

Sunac Joins Trend of Developers Spinning Off Property Management Units


Real estate developer Sunac China Holdings Ltd. plans to spin off its wholly owned property management subsidiary, Sunac Service Holding Ltd., by listing it in Hong Kong.

With the announcement (link in Chinese) Thursday, China’s fourth-largest property developer by sales has become the latest domestic real estate giant to put a property management unit’s shares on the auction block.

Sunac, which is mainly engaged in commercial and residential property development, management and investing, operates through several arms including Sunac Service, which mainly provides maintenance services for properties under the Sunac umbrella.

Sunac Service manages properties with a total gross area of 100.6 million square meters in 126 cities nationwide, making it the seventh largest among the listed companies in the business by amount of floor space under management.

In 2018, the number of newly listed property management subsidiaries more than doubled from the year before to six. The next year, nine mainland property service companies went public in Hong Kong and Shenzhen, including a unit of Poly Real Estate Co. Ltd. There are now 25 property management companies listed in Hong Kong, and the exchange has received prospectuses from 10 more looking to list, with industry heavyweights jumping on the bandwagon, according to real estate consultancy CricChina

China’s second-largest developer by sales, China Evergrande Group announced earlier this year it was considering listing its property management unit, though fellow giant China Vanke Co. Ltd. repeatedly denied it had similar plans.

The property management business clearly has the favor of investors. As of Saturday, the 10 largest property management companies in China had an average price-to-earnings ratio of 44.4, whereas the average ratio for their parent companies was 7.1.

Sunac plans to retain 50% of its subsidiary’s shares after the listing, according to Thursday’s statement.

For 2019, Sunac Service reported 270 million yuan ($38.7 million) in profit on 2.83 billion yuan in revenue.

Sunac bought 13 tourism projects and 76 hotels from Dalian Wanda Group Co. Ltd. for $9.3 billion in 2017, the same year when its founder Sun Hongbin cost the company 16.8 billion yuan in a failed attempt to rescue the debt-plagued former tech giant LeEco.

Contact editor Michael Bellart (

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