(Yicai) Feb. 12 — The management and organizational overhaul that Chinese property developers began last year is continuing, forced by persistent sales weakness, multi-year losses, and an industry shift toward leaner, more focused business models.
Twelve builders have announced senior executive changes since the start of last month, including routine retirements and voluntary resignations. Joy City Property said on Feb. 9 that Director Chen Lang resigned after reaching retirement age, and RiseSun Real Estate said on Feb. 6 that Wu Xiaofeng, director, vice president, and board secretary, had stepped down for personal reasons.
In addition, six big developers have kicked off a fresh round of organizational changes. Among them, Poly Development and Holdings Group, China Overseas Property Holdings, Huafa Properties, and C&D Real Estate Group are on their second round since last year, while Longfor Group is implementing a third.
China Overseas Property has disbanded its four regional units — East China, South China, North China, and Central and West China — moving away from its long-standing three-tier management model of “headquarters + region + city” to a two-tier model of “headquarters + city or region.”
Builders of all ownership types and sizes are making top-level management team adjustments, mainly because sales remains under pressure, and they need to find ways to restore profitability after many years of losses, Liu Shui, director of corporate research at think tank China Index Academy, told Yicai.
As the industry pivots from large-scale developments to refined operations and an asset-light business model, companies need new leadership to steer the strategic transformation and operational realignment, Liu pointed out.
In this new phase, executives must reshape their skill sets and move their firms away from a business model centred on land arbitrage, rapid expansion, and high leverage with high turnover, and instead focus on reading economic cycles and long-term trends, safeguarding finances, and building a robust financial system, Liu said.
They must also step up their product and service management and control, operational efficiency and cost control, and sharpen their ability to judge market demand to ensure land acquisitions are tightly aligned with real consumer and market needs, Liu added.
Editors: Tang Shihua, Futura Costaglione