HONG KONG: Chinese developers are heeding Beijing’s call and accelerating a push into asset-light businesses such as property services and commercial real estate to cut their reliance on a high-debt, high-turnover model blamed for a liquidity crisis in the sector.

       KWG Group Holdings, CIFI Holdings and state-backed China Resources Land were among developers that listed diversification plans along with their recent financial results.

       The diversification moves come even as property companies are targeting asset sales to raise cash for repaying creditors and, according to analysts and developers, will pile cost pressure on the smaller firms.

       Chinese developers have for years relied on high-leverage financing to target rapid growth through a build-to-sell quickly model.

       This model worked well until property sales slowed and market liquidity tightened in 2021.

       A string of offshore bond defaults by China Evergrande Group – the second largest property developer in China by sales – and others in the last few months triggered concerns about the financial market impact of a stifling debt crisis in the sector. — Reuters