China Institute of Research: In 2024, the real estate industry achieved a total bond financing of 565.31 billion yuan, a year-on-year decrease of 18.4%.

The data released by the Zhongzhi Research Institute shows that in 2024, the real estate industry achieved a total of 565.31 billion yuan in bond financing, a year-on-year decrease of 18.4%. Among them, credit bonds decreased by 18.5% year-on-year, overseas bonds decreased by 69.5% year-on-year, and ABS decreased by 13.6% year-on-year. Overseas bonds continued to decline at a low level, credit bonds became the absolute main force of financing, and ABS financing accounted for over one-third. Looking ahead to 2025, increased policy efforts are expected to drive expected recovery, but the real estate market still faces many challenges in its recovery, financing policies are expected to remain loose, but financing scale will still be affected by market recovery. The Zhongzhi Research Institute stated that in 2024, China's real estate market as a whole still showed an adjustment trend. The 9.26 Politburo meeting proposed to "promote the stabilization of the real estate market", releasing the strongest stability signal. Relevant departments and localities actively implemented policies, and since the fourth quarter, core city markets have shown a significant warming trend. Real estate financing support policies for real estate enterprises remain loose, financing tools are more diversified, bond financing scale continues to decline, with credit bonds and ABS becoming the absolute main forces. 1. Financing scale: Decreased by 18.4% year-on-year, continuing to decline In 2024, the real estate industry achieved a total of 565.31 billion yuan in bond financing, a year-on-year decrease of 18.4%. Since the second half of 2021, the industry has begun to enter a downturn cycle, with financing scale falling sharply, continuing the downward trend in 2024, with a wider decline compared to the previous year. Among them, credit bonds decreased by 18.5% year-on-year, overseas bonds decreased by 69.5% year-on-year, and ABS decreased by 13.6% year-on-year. From a monthly perspective, since September, under the influence of the low base number of the previous year, the total amount of bond financing has consecutively increased year-on-year, real estate enterprise financing has slightly rebounded, and its sustainability remains to be observed. 2. Financing structure: Credit bonds are the main source of financing, with an increase in ABS issuance Credit Bonds: Monthly issuance scale rebounded at the end of the year, with central enterprises being the absolute main issuers In 2024, the credit bond issuance scale in the real estate industry was 344.85 billion yuan, a year-on-year decrease of 18.5%, accounting for 61.0% of the total financing scale, which was basically the same as the previous year. The average issuance term was 3.16 years, with the proportion of issuance terms over 3 years increasing by 3.7 percentage points compared to the previous year, indicating an extension in terms. The issuance terms of credit bonds for mixed-ownership and private real estate enterprises have been extended, with the proportion of bond issuance over 3 years significantly increasing. In 2024, private enterprises issued bonds at a low level, with only 8 companies issuing bonds compared to the previous year, mainly larger enterprises that have not yet encountered financial difficulties. Currently, the credit bond issuance channel remains open to high-quality real estate enterprises, but the overall number of benefiting enterprises is relatively limited. In September, the People's Bank of China stated in a press conference that the "Financial 16 Measures" policy has been extended from the end of 2024 to the end of 2026. Support for private real estate enterprises in issuing bonds and financing will continue to be implemented, helping enterprises diversify their financing channels, especially as the real estate market stabilizes, some focus on core cities and financially stable real estate enterprises may benefit first, and thus receive more abundant financial support. Overseas Bonds: Continues to decline on a low level basis, with shorter terms In 2024, the issuance scale of overseas bonds was only 6.90 billion yuan, a year-on-year decrease of 69.5%, accounting for 1.2% of the total financing scale, a decrease of 2.0 percentage points compared to the previous year; the average issuance term was 2.50 years, with all issuance terms being below 3 years, indicating shorter terms, making it difficult for real estate enterprises to obtain long-term support from overseas. From a monthly perspective, there were no new bond issuances from August to December, with the overseas bond channel nearly closed. Only a few high-quality enterprises had the ability to issue overseas bonds in other months. Overseas bond issuers were mainly from Evergrande.Mainly state-owned enterprises such as Minmetals.ABS: Financing scale ratio rises, CMBS/CMBN with underlying asset support, REITs-like products account for over sixty percent In 2024, the financing scale of ABS was 213.76 billion yuan, a year-on-year decrease of 13.6%, accounting for 37.8% of the total financing scale, an increase of 2.1 percentage points from the previous year; the average issuance period was 9.85 years, and the period was significantly extended. Looking at a monthly basis, in the first half of the year, the average monthly issuance scale of ABS was only around 15 billion yuan. In the second half of the year, ABS issuances started to pick up, with monthly issuance scales of over 20 billion yuan. The issuance scale slightly declined in October, but rebounded at the end of the year. In terms of issuance structure, REITs-like products and CMBS/CMBN became the main issuance types, accounting for 38.1% and 31.5%, respectively. The proportion of REITs-like products increased rapidly, with an increase of 20.7 percentage points in issuance ratio. Overall, throughout the year, ABS products with high-quality underlying asset support remained the main type, and the ABS channel has always been open to enterprises holding high-quality assets. In the public REITs market, since the policy window opened, a total of seven consumer infrastructure REITs products have been listed, with issuers including Jinmao, Wumart, China Resources, Inlight, Bailian, Shouchuang, and Grandjoy Holdings Group, covering enterprises of different ownership types. Industrial park public REITs continued to expand, with the first privately-owned industrial park public REITs completing issuance in November, with China Merchants Shekou Industrial Zone Holdings' REIT receiving a net subscription amount of 1.617 billion yuan. In July, infrastructure public REITs added assets such as elderly facilities. After more than three years of development, the public REITs market has entered a normalized issuance phase, with stable and positive trends. On January 3, 2025, the National Development and Reform Commission stated at a press conference that they will support the expansion and broadening of the infrastructure REITs market, with public REITs becoming an important financial tool for real estate companies to revitalize existing assets and transition to new development models. Throughout the year, the Shanghai Stock Exchange and Shenzhen Stock Exchange have accelerated the landing of holding-type real estate ABS products, another financial tool for revitalizing existing assets. In November, the CITIC SEC-Yue Xiu Commercial Holding Real Estate Asset Support Special Plan was issued, the market's first commercial property holding real estate ABS, with a project size of 1.413 billion yuan, focusing on the ICC Raffles City and underground parking lot as underlying properties. Currently, financial instruments such as infrastructure REITs and holding-type real estate ABS continue to land, providing valuable exit channels for properties such as shopping centers, long-term apartments, and industrial parks, improving the financial loop of property development and operation throughout the entire lifecycle. Holding-type properties have become an important means for real estate companies to revitalize assets and supplement funds in a downturn, allowing real estate companies to benefit from diversified operations and gradually transition to new development models.