Caixin
Oct 11, 2021 09:40 PM
TECH

ByteDance Pushes Into Property With New Real Estate Broker’s License

A Maitian branch in Xiamen, East China’s Fujian province, on April 30. Photo: VCG
A Maitian branch in Xiamen, East China’s Fujian province, on April 30. Photo: VCG

ByteDance Inc., the owner of global short-video sharing sensation TikTok, is gearing up to enter China’s highly regulated rental housing market after obtaining a real estate broker’s license and making other recent moves that could help it compete against established real estate portals.

ByteDance, which has been working to diversify its revenue by expanding into gaming, education, health care and hardware, is entering a property market where national and local regulators are tightening oversight after high-profile collapses with developers unable to repay their debts.

Beijing Haofang Youxing Information Technology Co. Ltd., a wholly owned subsidiary of ByteDance, has quietly taken a 100% stake in Beijing Fuwang Real Estate Agency Co. Ltd., a unit of Beijing Maitian Real Estate Brokerage Co. Ltd., according to corporate information provider Tianyancha.

The deal, finalized on Sept. 29, appears to give ByteDance a shortcut for entering the Chinese rental property market, which is dominated by realtors such as Lianjia (Beijing Homelink Real Estate Brokerage Co. Ltd.) and 5i5j (Beijing 5i5j Real Estate Brokerage Co. Ltd.).

Maitian offers real estate rentals and sales for high-end customers from more than 900 company-run outlets in Beijing and the Fujian coastal cities of Fuzhou and Xiamen, according to its website. A Maitian representative told Caixin the share purchase deal allows ByteDance to obtain a real estate broker license but that the ownership of Maitian outlets remains unchanged.

ByteDance’s moves into the real estate brokerage industry dates back two years ago when the TikTok owner acquired Xingfuli, an app that helps users find properties that are for sale and rent.

Currently, Xingfuli is teaming up with Maitian to conduct a sales promotion activity aimed at subsidizing buyers with plans to buy second-hand homes under the management of Maitian. However, a Xingfuli representative told Caixin that the Xingfuli app now only serves as an information provider and that it has no plans to open physical outlets to handle property transactions.

But in the last three months, ByteDance has been increasing investment in the sector by setting up several companies with scope for real estate brokering. These include Hefei Haofang Youxing Information Technology Co. Ltd., Hainan Xingfuli Technology Co. Ltd. and Fujian Haofang Youxing Information Technology Co. Ltd.

ByteDance’s recent property moves, including taking full ownership of Maitian’s Fuwang business, follows the collapse late last year of Danke Apartment. Danke was once one of China’s largest online apartment rental platforms, and its fall sent shockwaves through the country’s massive housing rental market and sounded alarms over the industry’s debt-driven growth.

The Chinese government has begun taking stricter measures to curb developers’ ability to increase their borrowings, including the notable “three red lines” policy imposed last September, which determines the bottom lines for developers’ liability-to-asset ratio, net debt-to-equity ratio and cash-to-short-term debt ratio.

In 2017, Beijing authorities suspended registration of new real estate brokerage firms as part of efforts to curb the city’s soaring housing prices caused by speculative buying. Caixin has learned that the Chinese capital resumed the registration in July this year, prompting some analysts to speculate that the ByteDance share purchase deal could pave the way for its outright acquisition of Maitian in the future.

Other internet giants besides ByteDance have begun dipping their toes into the property market, but with little to show for their efforts so far. In May 2020, JD.com Inc. launched an online platform for developers to sell their properties, for example.

Four months later, Alibaba Group Holding Ltd. partnered with real estate services provider E-House (China) Enterprise Holdings Ltd. to launch an online real estate trading platform Tmall Haofang for developers, agents and financial institutions to seek partnerships. However, Alibaba transferred its entire 85% stake in Tmall Haofang to E-House Enterprise in May this year, retreating from the new business.

Contact reporter Ding Yi (yiding@caixin.com) and editor Flynn Murphy (flynnmurphy@caixin.com)

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