China

Vanke to Invest RMB 3 Bln in Chinese Real Estate Brokerage Firm Lianjia

Summary:

  • China Vanke (000002.SZ/2202.HK) plans to invest RMB 3 billion in Beijing Lianjia Real Estate Brokerage Co., Ltd., as reported by Tencent Finance.
  • The size of the stake which Vanke will obtain through the investment is not immediately known.

Why It Matters:

  • Founded in 2001, Lianjia is the largest real estate brokerage firm in China based on transaction value. Lianjia has more than 8,000 offices across the country. The company’s total transaction value for 2015 was RMB 709 billion. The company posted a pre-tax net profit of RMB 1.2 billion for 2015.
  • In January 2017, Lianjia received a RMB 2.6 billion investment from Chinese real estate developer Sunac China Holdings Limited (1918.HK). Sunac obtained a 6.25% stake in Lianjia through the investment. At that time, Lianjia was valued at around RMB 41.6 billion.
  • Lianjia initially began by focusing only on the Beijing local market and traditional brokerage businesses. Recently, Lianjia has started to enter other Chinese cities, and the company has also started to invest significantly in building a big data platform. Through making this strategic investment, Vanke is seeking both investment returns and support from Lianjia for Vanke’s own real estate businesses.