China Resources Mixc Lifestyle in Talks for JLL China Business
(Bloomberg) -- Jones Lang LaSalle Inc. has picked China Resources Mixc Lifestyle Services Ltd. as the preferred bidder for its China real estate management unit, people familiar with the matter said.
The property management arm of state-owned China Resources Group is poised to trump rivals including Sunac Services Holdings Ltd. and China Vanke Co., said the people, who asked not to be identified as the information is private. The Chicago-based real estate services provider is seeking more than $500 million from a divestment of the unit, Bloomberg News has reported.
Shares in China Resources Mixc climbed as much as 3.5% in Hong Kong trading on Thursday, their highest intraday level since Aug. 12. JLL declined 1.4% on Wednesday in New York.
Deliberations are ongoing and could still be delayed or fall apart, and no final decisions have been made, said the people. An external representative for JLL declined to comment, while representatives for China Resources Mixc, Sunac Services and Vanke didn’t immediately respond to emails and calls requesting comment during a holiday in China.
The potential deal comes as developers in China, hit with slumping sales figures and regulatory limits on credit, are buying the property management units of troubled rivals. Home sales by value slumped 20% in August from a year earlier.
Hopson Development Holdings Ltd. plans to acquire a majority stake in China Evergrande Group’s property-services arm, Chinese financial platform Cailian reported on Monday. Country Garden Services Holdings Co. announced an agreement last month to acquire the property management business assets from Fantasia Holdings Group Co.’s Colour Life Services Group.
What Bloomberg Intelligence Says:
Property managers’ M&A chase appears to have staying power, fueled by their thirst for scale as organic growth dwindles. Those backed by midsized developers with weaker project pipelines -- such as Shimao Services and A-Living -- may pursue acquisitions more aggressively. Some face a gradual slowdown in contracted sales growth as stringent housing policies, and pressure to deleverage, threaten to impair the project pipeline to managers.
- Michael Tam and Patrick Wong, real estate analysts
Click here to read the research.
The sale of JLL’s property management business in China doesn’t include its property brokerage and valuation business in the country, people with knowledge of the matter have said.
JLL operates in more than 80 countries and employs nearly 91,000 people, according to its 2020 annual report. The company reported $16.6 billion in revenue last year, of which 58% came from property and facility management services. The Greater China region accounted for 32% of its $3.1 billion revenue in Asia Pacific, the report showed.
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