Gree Real Estate Changes Direction and Gets Out of the Real Estate Business

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Gree Real Estate Co. Ltd. is controlled by Zhuhai Municipal State-owned Assets Supervision and Administration Commission.

Gree Real Estate Co. Ltd. has become the third listed developer in recent months to announce they are leaving the property development business. The unit of Gree Electric Appliances has decided to scrap its restructuring plan and move out of property development.

Originally, Gree Real Estate intended to buy 100% of Zhuhai Duty Free Enterprise Group Co. Ltd. by raising funds from no more than 35 specific investors in a private placement. However, changing conditions have led the company's board to withdraw the original plan and make significant adjustments.

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Gree Real Estate Co. Ltd. is exiting property development, becoming the third developer to do so recently.
The company has abandoned its original restructuring plan to raise funds and purchase Zhuhai Duty Free Enterprise Group and will sell real estate assets instead.
Similar exits by Huayuan Property and Midea Real Estate have shifted these companies towards asset-light operations, with their market reactions being positive.

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Who’s Who

Gree Real Estate Co. Ltd.: Gree Real Estate Co. Ltd., a subsidiary of Gree Electric Appliances, is exiting the property development business. Initially planning to acquire 100% of Zhuhai Duty Free Enterprise Group Co. Ltd., it now aims to buy at least 51% equity without issuing new shares. This move aligns with Zhuhai government's broader restructuring plan. Recent setbacks included investigations by the CSRC. Gree is the third developer to exit the sector, following Huayuan Property and Midea Real Estate.

Zhuhai Duty Free Enterprise Group Co. Ltd.: Zhuhai Duty Free Enterprise Group Co. Ltd. is a company targeted for acquisition by Gree Real Estate Co. Ltd., with plans to buy at least 51% equity. Both companies are under the Zhuhai Municipal State-owned Assets Supervision and Administration Commission, and this acquisition is part of the Zhuhai government's broader plan to restructure its 16 state-owned enterprises.

Huayuan Property Co. Ltd.: Huayuan Property Co. Ltd. announced its withdrawal from the property development sector in April. The company plans to transfer its property development assets to its controlling shareholder and shift its focus to asset-light business operations, such as hotels and property management. This strategic move has led to positive market reactions and significant share price increases.

Midea Real Estate Holding Ltd.: Midea Real Estate Holding Ltd. announced plans in June to divest its real estate development business to its controlling shareholders and shift towards asset-light operations. This strategy mirrors other companies' recent moves and has led to a positive market reaction with significant share price increases.

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What Happened When

May 2020：: The original restructuring plan of Gree Real Estate was first disclosed.

February 2021：: The original restructuring plan was suspended due to an investigation by the China Securities Regulatory Commission (CSRC) into Lu Junsi, the former Gree Real Estate chairman.

November 2022：: Gree Real Estate announced a renewed effort to pursue the restructuring after the election of a new board.

July 2023：: The restructuring process was delayed again when Gree Real Estate was investigated by the CSRC for suspected information disclosure violations.