In recent months, A-Living Services announced that it has acquired a 60% stake in Zhongmin Property at a fixed consideration of more than RMB 1.5 billion and a 60% stake in Xinzhongmin Property with variable consideration, but the scale is no more than RMB 500 million. Half of the acquisitions are public property management areas, which is expected to be the future growth of the sector and unlikely to be affected by the property market cycle. Sources indicate that the government is opening up the public property management market; according to a UBS research report, the existing public property management market in the Mainland is worth RMB 400 billion, accounting for more than 65% of the residential property management market, reflecting the huge property management market in Mainland China. Although profit margins and management fees need to be re-examined every one to three years, public property management fees are relatively stable compared to residential and commercial property management.
In terms of the residential property management market, the Mainland property market has further stabilised this year. It is expected that the property management industry in the Mainland will undergo a rapid development stage in the coming few years. Since most of the Mainland property management companies currently listed in Hong Kong are divested from domestic parent companies in China, they have reliable income and show a trend of profit growth. Mainlanders’ economic outlook has continued to improve, and owners have generally raised their requirements for property management companies. In fact, basic residential property management services include providing safety, cleaning, greening and gardening, repairing and maintenance services. At the same time, non-owner value-added services include providing joint sales services and advertising and property agency and home inspection services to real estate developers. With the rapid development of real estate in Hong Kong and the Greater Bay Area, property management fees continue to rise, and the development potential of the property management market continues to increase. It is expected to intensify competition in the industry and optimise the service quality of various professional management teams at home and abroad. In addition to high-quality property management services, owners also have the chance to further increase the potential property appreciation in the following years.