China Bulk Asset Sales Surge 76.2% in H1 2026, First-Tier Cities Dominate

By the end of June, a ground-floor retail property in a prime area of a first-tier city was listed for sale. In past years, such assets were among the hardest for developers to offload, often sitting unsold for one to two years. But this time, multiple buyers inquired, and the asset sold at a slight premium. Since the start of 2026, similar transactions have become more frequent, with inquiries and deals for commercial, office, hotel, and luxury residential properties in first- and second-tier cities rising notably compared with 2025. In the first half of 2026, national bulk asset transaction volume reached 121.2 billion yuan, up 76.2% year-on-year.

The surge in transaction volume does not signal a broad market recovery. Most assets that traded in 2026 shared two traits: they were of good quality and became attractive after price cuts, and they had stable operations capable of generating steady cash flow. Buyers were less concerned with short-term price appreciation and more focused on current rental income and long-term returns. Years of price adjustments have brought some high-quality assets into the range that buyers consider acceptable. The gradual expansion of securitization channels, such as commercial real estate REITs, has also provided investors with additional exit options.

On July 23, the Sheraton Ningbo Donggang Hotel was listed for sale on the Alibaba asset platform and was won by a local food company at the reserve price of 360 million yuan. The hotel has a gross floor area of 66,000 square meters, equating to a unit price of about 5,455 yuan per square meter. It has been open for nearly 20 years, with 378 guest rooms, conference halls, ballrooms, restaurants, an executive lounge, a swimming pool, and a fitness center. The appraisal report gave a valuation of 613 million yuan, meaning the transaction price was 60% of the appraised value. Since 2021, liquidity pressure in the real estate sector has been acute, and some developers have sold hotels at discounts to raise funds. Hotels with operating cash flow have attracted industrial capital and private enterprises after price reductions.

Since the start of 2026, hotels traded across the country include: Yunnan Xiangyun Industrial purchased the Shenzhen Taiziwan MGM Hotel for 2 billion yuan; two luxury hotels owned by R&F Properties in Wuhan and Hefei were taken over by private enterprises; and the Shijiazhuang Jingzhou International Hotel was acquired by Hebei Fujing Commercial Management for 349 million yuan. These transactions were generally priced below appraised values, with the R&F hotels in Wuhan and Hefei selling at less than 60% of valuation, and the Shijiazhuang hotel at about 76%.

Commercial office assets have been actively traded since 2026. In July, Megasino acquired Tower A of Shanghai Vijing Center from foreign institutions including HSBC for 285 million yuan, using a debt-assumption structure: the cash consideration was 86 million yuan, with the buyer assuming 199 million yuan in debt. In June, an entity related to Pinduoduo bought the Shanghai DBS Bank Tower for 3.37 billion yuan, equating to a unit price of 73,300 yuan per square meter. The tower, located in Lujiazui Financial Center, has a total floor area of 46,000 square meters and was the largest single bulk transaction in Shanghai in the first half of the year.

Residential properties with strong scarcity and good value have also seen increased activity. In July, four units of a renovated courtyard house at No. 3 Babukou Hutong near Beijing's Drum Tower sold for a total of 785 million yuan, with the highest-priced unit at 396 million yuan and an average unit price exceeding 100,000 yuan per square meter. In the same month, a sea-view villa in Shenzhen's Banshan was auctioned on the Alibaba asset platform, selling for 87.08 million yuan after 167 rounds of bidding, a 360% premium over the starting price. In June, a top-floor duplex in Shenzhen's Peninsula City sold at the reserve price of 70.73 million yuan. In the first half of the year, a top-floor duplex in Hangzhou's Wang Tianji sold for 152 million yuan, at a unit price of 243,900 yuan per square meter. According to a report, in the first half of the year, retail commercial properties had 32 transactions totaling 37.08 billion yuan, leading all asset types; office properties had 43 transactions worth 25.74 billion yuan; hotels and apartments had 46 transactions worth 16.78 billion yuan; mixed-use projects had 12 transactions worth 20.36 billion yuan; industrial and logistics properties had 45 transactions worth 10.74 billion yuan; data centers had one transaction worth 5.39 billion yuan; business parks had nine transactions worth 2.91 billion yuan; and other assets had four transactions worth 2.17 billion yuan.

Representative bulk transactions in the first half of the year saw sellers mainly from real estate developers and foreign institutions. The original holders of Shanghai DBS Bank Tower, Xinmao Tower, and Xenon Plaza were all foreign funds or investment banks, and the original holder of Beijing Huiju Center was also a foreign enterprise. Assets sold by developers fell into two categories: those sold voluntarily to raise funds, such as the Beijing Poly Grand Plaza project, and those forced into disposal due to debt disputes, such as some hotels owned by R&F Properties. Buyers were predominantly domestic institutions, enterprises, and individuals, with foreign buyers accounting for only 3%. Among domestic buyers, investment institutions and insurance funds had the highest share at 33.6%. Insurers such as Dajia Insurance, AIA Life Insurance, and Zhonghong Life Insurance frequently participated in commercial complex transactions, with targets including Beijing Dinghao DH3 and Shanghai Ruian Xintiandi. In June, Chengdu Mixc was sold to Chengdu Rungchengxin Commercial Management Co. , Ltd. , whose shareholder is CITIC Securities, for 8.475 billion yuan.

Private enterprises were the second-largest buyer group, executing many transactions with relatively small individual amounts, focusing on retail commercial, industrial plants, hotels, self-use office buildings, and industrial parks. Representative deals include Yajingyuan Technology acquiring Shenzhen Longgang Intelligent Manufacturing Park, a Pinduoduo-related entity buying the Shanghai DBS Bank Tower, JD. com acquiring the Beijing Huantongda Logistics Park, and Megasino purchasing Tower A of Shanghai Vijing Center. State-owned entities and government platforms mainly acquired large mixed-use projects, business parks, and industrial logistics assets, including Suzhou Xinlian and others jointly acquiring Zhuanqiao Wanda, Shanghai Kaicheng Holdings acquiring the Shutong Valley, Shanxi Tourism Group and Taiyuan Heavy Machinery jointly acquiring a shopping mall in Taiyuan, and Tianjin Lingang Holdings acquiring an industrial construction-in-progress. Among foreign buyers, the Bank of East Asia acquired the Bank of East Asia Tower, and the Government of Singapore Investment Corporation (GIC) participated in the equity acquisition of Shanghai Hongqiao Vanke Center.

Transactions continued to concentrate in core cities. In the first half of the year, first-tier cities accounted for 65.3% of national transaction value, with Shanghai and Beijing at 30.6% and 25% respectively, and Shenzhen and Guangzhou combined at about 10%. The buyer and seller sides for commercial office and hotel assets were relatively concentrated, while luxury residential transactions were more dispersed. On July 3, a standalone villa in Beijing's Chaoyang District Fucheng Garden sold for 75.36 million yuan, with a floor area of 399.2 square meters, at a unit price of 188,800 yuan per square meter. Auction information showed that the property owner was Song, the legal representative of Beijing Hengtong Vision Technology Development Co. The company owed 59.438 million yuan to the East Dongdan Branch of Industrial Bank and was subject to enforcement. In June, the court auctioned the villa on JD. com's asset platform, and after 171 bids, the property was won by a natural person, Liu, at a 135.5% premium over the starting price. In May, a villa in Beijing's Chaoyang District Dongshan Villa, with a floor area of 774.2 square meters, sold for 79.26 million yuan after 18 bids, entering foreclosure due to debt default by Zhonghe Group.

In the past, bulk asset buyers focused on regional planning, subway lines, and surrounding land prices, calculating resale spreads. Now, they pay more attention to lease terms, tenant mix, vacancy rates, and annual cash flow, assessing whether rental returns can cover capital costs. Currently, buyers generally require a yield of at least 4% for prime office assets in first-tier cities, with higher requirements for retail commercial and hotel assets. Such yields were difficult to achieve a few years ago, when prime office assets in first-tier cities had rental returns consistently below 3%, and investors relied on asset appreciation for returns. In recent years, both rents and sale prices have declined, but prices have fallen more sharply, pushing rental yields higher.

Insurance funds have been important buyers in the bulk asset market, with low capital costs, long-term horizons, and a preference for mature assets with stable cash flow. In the first half of the year, insurers appearing frequently on the buyer list acquired commercial complexes that had already passed the initial lease-up phase and had relatively stable occupancy rates and sales. Exit channels are also evolving. After public REITs expanded to include consumer infrastructure, assets such as shopping malls and community retail have entered the issuance scope, gradually forming a chain of acquisition, renovation, operation, and REIT listing. The REIT market provides both a pricing reference for institutions and an additional exit route.

Private enterprises and industrial capital focused on acquiring self-use office buildings, factories, industrial parks, and retail properties, with some buyers being original tenants or operators. State-owned and local government platforms typically acquired assets with goals of industrial development and urban renewal, targeting large mixed-use projects, business parks, industrial logistics projects, and construction-in-progress. These transactions often related to building investment attraction platforms, industrial introduction, or revitalizing existing assets, with price not being the sole consideration.

Foreign sellers' decisions were influenced by global asset allocation. When offshore interest rates are high and FX hedging costs rise, the attractiveness of renminbi-denominated real estate returns diminishes, leading some foreign investors to reduce holdings in mainland properties to deploy capital elsewhere. In contrast, some long-term funds chose to increase exposure, with a longer holding period and higher tolerance for short-term volatility. Luxury residential buyers were mostly natural persons or their controlled companies. The foreclosure market offered buyers discounted access to scarce residential properties in prime locations. In 2026, some standalone villas entering foreclosure stemmed from debt issues of original owners or related companies. Low starting prices attracted multiple bidders, and some properties sold at high premiums. Such assets are high-ticket, with limited supply and few comparable transactions, leading to potentially high premiums during bidding, but they also suffer from weak liquidity and long realization periods.

Bulk asset transactions in the first half of the year rebounded significantly, but aside from a few scarce assets that sold at premiums, most deals closed at substantial discounts. Deals are closing only on assets where the numbers work for buyers; those that cannot be justified remain unsold no matter how long they are listed.