Yuzhou Group to Spin Off Property Management Unit in HK IPO

What’s New: Real estate developer Yuzhou Group Holdings Co. Ltd. plans to spin off its property management unit U Life Services Group Co. Ltd. in a Hong Kong initial public offering, joining a long series of mainland property companies making similar moves.

Xiamen-based Yuzhou said it will transfer all of its U Life Services holdings to shareholders. Yuzhou President Lin Longan, who owns 59.1% of Yuzhou, will be the largest shareholder of the firm after the spinoff.

U Life Services is mainly engaged in managing residential properties and commercial office buildings. It generated 213 million yuan ($32.5 million) in first-half revenue, accounting for roughly four-fifths of Yuzhou’s total revenue, according to the prospectus.

The Background: Mainland property developers have been spinning off service units since 2018, when the number of newly listed property management subsidiaries more than doubled from the year before to six. In 2019, nine mainland property service companies went public in Hong Kong and Shenzhen, including that of the leading player Poly Real Estate Group.

Property service units are on a fast track to the trading board as pandemic-induced community-wide lockdowns have brought attention to the property service industry.

According to real estate consultancy CricChina, there are 25 property service companies now listed in Hong Kong and 10 newly submitted prospectuses this year.

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.

A previous version of this story gave the incorrect name for Yuzhou Group Holdings’ property management unit. It is U Life Services Group Co. Ltd.

Contact reporter Anniek Bao (yunxinbao@caixin.com) and editor Bob Simison (bobsimison@caixin.com).

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