State-owned property developer China Resources Land (01109.HK) adopted a more cautious approach to land acquisition in 2024 amid the persistent downturn in the real estate sector.
According to its financial report, the company acquired 29 land plots last year, adding a total planned construction area of 3.93 million square meters, with an equity land price payment of RMB 52.65 billion.
The number of land acquisitions tumbled by about 57.35% year-on-year, the newly added land reserves’ planned construction area plunged by about 70.34%, and the investment amount fell by about 52.91%.
Due to the sharp reduction in land acquisitions, China Resources Land’s total land reserves stood at 51.94 million square meters at the end of 2024, down 16.9% year-on-year, and its land reserves for development were 43.9 million square meters, a 16.3% decline from a year earlier.
China’s property market downturn has persisted for more than three years. In 2022 and 2023, China Resources Land was one of the few developers expanding against the trend. However, with the continued cooling of the housing market in 2024, property developers have scaled back land acquisitions, and China Resources Land has become increasingly cautious with investments.
According to data from real estate research CRIC, the total land acquisition amount of the country’s top 100 developers decreased by 31% year-on-year in 2024 to RMB 1.0729 trillion, slumping by 76% from the 2020 peak. Among them, state-owned developers saw a 36% decline in land acquisition spending. China Resources Land’s investment contraction outpaced both the industry and state-owned developer averages.
Despite the decline, China Resources Land remains one of the industry’s most aggressive investors. According to a ranking by China Index Academy, the company ranked third in equity land acquisition value and first in equity land acquisition area in 2024.
At the annual results conference, China Resources Land’s Chief Strategy Officer Zhang Xin said that the company adheres to an investment strategy of maintaining financial prudence and ensuring cash flow security.
Following the land acquisition scale-back, China Resources Land’s cash and cash equivalents stood at about RMB 131.29 billion at the end of 2024, a year-on-year increase of 16.52%.
Zhang emphasized that for the past three years, the company has focused on high-tier cities, with 94% of new investments concentrated in mainstream areas of first- and second-tier cities. Core cities such as Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, and Chengdu accounted for 72% of the company’s investments.
He also highlighted the company’s commitment to accelerating inventory clearance and leveraging government support policies to activate land assets. Currently, 82% of China Resources Land’s land reserves are in first- and second-tier cities, ensuring long-term sustainable growth.
As 2025 begins, the land market in core cities is showing signs of a rebound, with some state-owned developers seizing the opportunity to acquire prime plots. According to CRIC, only eight developers had land acquisition expenditures exceeding RMB 10 billion in the first two months of 2025, with China Resources Land leading at RMB 31.77 billion.
China Resources Land maintains that only projects in core cities and prime locations can sustain strong sales during market downturns. The company aims for its total contracted sales to outperform the market while maintaining a top-four industry ranking.
Financial results show that in 2024, China Resources Land achieved contracted sales of RMB 261.1 billion, with a contracted sales area of 11.34 million square meters, down 15% and 13.3% year-on-year, respectively.
Despite the industry-wide downturn, the company’s sales decline was less severe than the sector average. According to CRIC, the company ranked third in total sales in 2024, moving up one spot from 2023.
However, China Resources Land has yet to overcome its “revenue growth without profit growth” dilemma. In 2024, the company recorded total revenue of RMB 278.8 billion, an 11% increase year-on-year, however, its core net profit fell 8.5% to RMB 25.42 billion.
The development business contributed RMB 237.15 billion in revenue, accounting for 85.1% of total revenue. However, its core net profit contribution was only RMB 15.08 billion, representing 59.3% of total core net profit.
The company’s overall gross margin fell to 21.6%, down 3.6 percentage points year-on-year. The development business’ gross margin dropped to 16.8%, a decline of 3.9 percentage points. Dragged down by the development business, China Resources Land’s gross margin has now declined for seven consecutive years.
The company’s focus on first- and second-tier cities has significantly increased land acquisition costs, squeezing profit margins. The company said that its development business’ average settlement cost in 2024 was RMB 18,439 per square meter, up 30.8% year-on-year. The land cost of settled properties surged by 54.8% to RMB 11,382 per square meter. In contrast, the average settlement price only rose by about 24.32% to RMB 22,268 per square meter.
On March 26, China Resources Land’s management stated that the gross margin of its development business is expected to bottom out between 2025 and 2026.