Bulk Real Estate Transactions Heat Up in First-Tier Cities, Multiple Physical Companies Make Large-Scale Property Purchases

The profound adjustments in the real estate market and the pullback in property prices have created more opportunities for bulk transaction buyers. Recently, several industry enterprises have made moves to acquire commercial office properties in first-tier cities such as Beijing, Shanghai, and Shenzhen.

On May 16, Shanghai Xinhuangpu Industrial (600638.SH) disclosed that the company intends to acquire the Silicon Valley SOHO-Building 2 project in Changping District, Beijing, from Beijing Boxing Zhongye Real Estate Company.

The underlying asset is the property rights of Building 2, No. 21 Zhongxing Road, Changping District, Beijing. Silicon Valley SOHO-Building 2 in Changping District is an office building project developed by Boxing Zhongye, a subsidiary of Beijing Zhenghong Real Estate Group, in 2017.

It is understood that the consideration for the property rights in this transaction is 215 million yuan. Based on a gross floor area of 21,759 m², the unit price is 9,880 yuan/m².

"This asset acquisition transaction will further enhance the company's business scale, expand its regional business layout, strengthen its market development capabilities, and enhance its sustainable operating and profitability capabilities," Xinhuangpu Industrial stated.

In addition to Shanghai Xinhuangpu Industrial, industry giants such as an elevator manufacturer, a technology company, and an "ophthalmology leader" have also entered the real estate market in recent times.

According to information released by JLL on April 22, a company under Zhejiang's leading private enterprise, Xizi International, acquired the Shanghai Jinglaifang project, but did not disclose the specific price of this transaction.

Public information shows that Jinglaifang is located in the Daning business district of Jing'an District, Shanghai, adjacent to the North-South Elevated Road and the Yanchang Road Station of Metro Line 1, and is an office property in the Daning area. The project consists of four independent office buildings with a total gross floor area of approximately 37,000 m².

According to information from Xizi International's official website, the company is among China's top 500 private enterprises and has developed into a diversified private enterprise group primarily engaged in elevator and parking equipment manufacturing.

While the elevator industry giant was making property purchases in Shanghai, technology enterprises also made their moves.

According to information released by Espressif Systems (Shanghai) Co., Ltd. (688018.SH) on April 30, the company intends to purchase the property located at Building 3, No. 3, Lane 235, Yubei Road, Pudong, Shanghai, from Shanghai Lujiazui Group. The gross floor area of the underlying property is 12,996.91 m², with a total price of approximately 437 million yuan.

According to Espressif's 2024 annual report, it is not just a chip company but also an ecosystem company covering IoT technologies. It possesses full-stack engineering capabilities, including hardware, operating systems, software solutions, cloud, and AI, providing one-stop AIoT products and services to enterprises and developers worldwide.

Regarding the purpose of this property purchase, the company stated that it intends to use it for the construction of projects funded by public offerings and for its R&D and office needs.

In addition, Aier Eye Hospital Group Co., Ltd. (300015.SZ) disclosed on May 13 that its wholly-owned subsidiary, Shenzhen Binhai Aier Eye Hospital, successfully acquired, through the Guangdong United Assets and Equity Exchange, a 60% stake in Shenzhen Grand Sun Digital Technology Co., Ltd. and a specific creditor's rights project.

The assets of the target company include the "Grand Sun Science and Technology Innovation Building," which Aier Eye plans to use as a long-term medical facility for Shenzhen Binhai Aier. The transaction was paid for with the company's own funds, with a transaction price of approximately 649 million yuan. Given that Shenzhen Liangshi Medical Investment Co., Ltd. holds a 40% stake in Grand Sun Digital, and Shenzhen Liangshi is a wholly-owned subsidiary of Aier Real Estate, which is in turn a wholly-owned subsidiary of the company's controlling shareholder, Aier Medical Investment Group, this transaction constitutes a related-party transaction.

Aier Eye stated that Shenzhen, as an economically developed and densely populated city, has a robust demand for ophthalmic medical services. Through this transaction, Shenzhen Binhai Aier will gain control of Grand Sun Digital, and its "Grand Sun Science and Technology Innovation Building" will serve as a long-term medical facility for Shenzhen Binhai Aier, further enhancing Shenzhen's medical service network.

Regarding multiple buyers purchasing commercial and office properties in first-tier cities, industry insiders pointed out that manufacturing and technology companies inherently have needs for office space and R&D facilities. These companies' purchases of properties may not necessarily be driven by investment considerations but rather by the need to meet their own office and business development requirements.

Taking the large-scale property transactions in Shanghai in the first quarter of this year as an example, Sun Ling, Head of Investment and Capital Markets for JLL East China, stated that from the perspective of transaction purposes, transactions primarily aimed at investment further increased in the first quarter of 2025, accounting for as much as 86%. At the same time, a portion of large-scale transactions were also driven by self-use needs.

Analysts believe that, from the perspective of market conditions, it is currently a good time for both self-use and investment buyers to enter the market.

"Although the current rental fundamentals and transaction sentiment still need improvement, the property investment market presents a situation of both opportunities and challenges. Buyers should remain vigilant, actively capture market signals, prudently analyze investment opportunities, and strive to seize the initiative as the market gradually recovers," said Wang Jing, Head of Investment and Capital Markets for CBRE East China.

In the view of Pang Shudong, Head of Investment and Capital Markets for JLL China, the current prices of real estate assets have become more reasonable after adjustments, and the synergistic effects of monetary policy easing and stimulus policies will become one of the key factors for market recovery.

"As the government continues to ramp up policies to boost consumption, we expect market confidence to gradually recover. High-quality retail, commercial, and other properties in prime locations, which offer stable operational income and superior operational performance, will demonstrate strong investment appeal," said Pang Shudong.

Wang Jing also believes that policies promoting consumption and industrial upgrading are expected to drive the release of demand for retail, commercial, and industrial real estate, thereby attracting a new round of investment interest.