Thursday, September 18, 2025

China’s Real Estate Crisis Spreads as More Developers Face Liquidity Problems

With China in a state of crisis over lack of electricity supply, its other problems in the real estate sector appear to be piling up.

It appears that yet another major real estate developer is on the brink of a liquidity crisis, as the Evergrande crisis weighs down on the property market. Sunac China Holdings Ltd, one of China’s other most indebted property developers, has reached out to local governments in a hail mary attempt to gain ‘special policy support,” as operations have become increasingly difficult amid tighter housing policies.

According to a letter sent to government authorities in eastern Shaoxing and seen by the South China Morning Post, Sunac complained that the tougher policies have caused issues with cash flow and damped sales on local projects. Although the letter failed to disclose what sort of aid the company was seeking, it did reveal that Sunac has already “run into big hurdles and difficulties in terms of cash flow and liquidity.”

The Hong Kong-listed real estate company’s latest cry for assistance suggests that the cash crunch experienced by Evergrande is not a localized issue, as the Chinese government looks to reduce leverage and cut back on housing activity. Although Sunac faces approximately only half of the liabilities that Evergrande has, it was still slapped with high speculative-grade ratings from the three major credit ratings agencies.

Sunac has also breached all of the three debt metrics introduced by the PBOC for real estate companies. As a result, the company is being forced to sell numerous assets and businesses such as its indoor ski parks in order to raise much-needed cash.

Sunac’s dollar bonds fell following media circulation of the letter, as its 5.95% bond due 2024 sunk to the lowest on record on Friday, while the company’s shares are down nearly 50% since the beginning of the year.

Information for this briefing was found via the SCMP. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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