Many of Shanghai's small and medium-sized property developers are seeking to be merged or acquired due to a lack of capital and land reserves, after the government released tightening policies to cool down the market.
According to statistics from the Shanghai United Asset and Equity Exchange (SUAEE), 13 real estate developers have registered to sell all or part of their stakes since the end of September, with the total reaching 720 million yuan (US$96.51 million).
Industry insiders said the increasing number of real estate firms selling off stakes was the result of banks tightening credit in the second half of the year, which pushed them to seek partners with plenty of capital.
Some small and medium-sized developers find it more difficult to get land from the government for business development, compared with the large State-owned developers.
Meanwhile, many large-scale real estate developers are on the hunt for merger and acquisition (M&A) opportunities. China Vanke Co bought a 50 percent stake in Shanghai Dijie Real Estate Co for two billion yuan in September, after getting 3 million sqm of land in Shanghai from other developers like Evergrande Real Estate Group.
Shanghai Industrial Holdings Ltd acquired a 19 percent stake in Shanghai Urban Development for 1.57 billion yuan in October to become the company's major shareholder.
M&A transactions in real estate registered with the SUAEE amounted to 495 million yuan in the first week of September, topping other sectors.