(Yicai) March 11 — Amid a broadly sluggish property market in China, smaller local developers are returning to land auctions and making determined bids for prime parcels.
Small and mid-sized private builders have started battling over premium land in their core markets, Liu Shui, director of corporate research at think tank China Index Academy, told Yicai. “Private developers bidding aggressively for land at high premiums shows that high-quality land assets still hold value, helping reverse pessimistic expectations and restore market confidence,” he said.
Those that have recently stepped up land purchases are mainly regional firms with deep roots in their local markets, focusing on cities where they have operated for years, such as Boce Real Estate Group and Huilong Real Estate Development, Liu said. Their strategy has shifted toward targeting specific plots in carefully selected cities, particularly sites in prime locations with low housing inventory and strong market certainty.
Boce Real Estate, a small developer in Zhejiang province, recently won a plot in Hangzhou after 30 rounds of bidding at a premium of nearly 20 percent during the city’s first land auction of the year. In Harbin, Huilong Real Estate, a small Heilongjiang province-based builder, secured two plots at the first local auction of 2026, including one that drew 184 bids before being sold at a premium of more than 60 percent.
In January and February, the real estate arm of Shanghai-based private investment giant Zijiang Group ranked fourth nationwide for newly acquired land, purchasing plots worth CNY4.6 billion (USD640 million), according to the latest data from China Real Estate Information Corporation. Huilong Real Estate placed 18th with CNY2.4 billion, while Boce Real Estate tied for 25th.
In general, however, China’s land market remains sluggish, Liu said. Total land purchases by the top 100 developers more than halved in the first two months of 2026 from a year earlier, while land purchases by private developers also declined sharply overall.
Smaller local developers vying for prime parcels will also accelerate the industry’s consolidation, creating a new market landscape in which big state-owned developers dominate while high-quality private builders compete through differentiated strategies, Liu noted.
Tough little developers are no longer pursuing nationwide expansion but are aiming instead to become leading players in their regions, competing with large state-backed firms that operate across the country, he added.
These private regional developers generally have low leverage, fund projects with their own capital, and operate under the principle of “spend only what you have,” Yu Xiaoyu, general manager of a think tank under the E-House China Research and Development Institute, told Yicai.
With leading builders either grappling with debt crises or pulling in their horns, land prices are no longer as inflated as before, creating growth opportunities for small and mid-sized private companies familiar with local market demand, Yu explained.
These smaller developers benefit from established customer bases, local brand awareness, and supply chains, Liu said. The plots they acquire are all in core urban areas, he noted. Given scarce supply, premium properties enjoy short destocking cycles and strong price resilience.
When developing high-premium plots, these smaller builders usually strive to improve product quality while controlling construction costs to maximize profit margins, according to Yu. For instance, they usually launch unit sales within six to eight months of buying the land and complete sales in 12 to 18 months, thereby shortening the capital recovery period as much as possible to reduce funding costs and market risks.
Editors: Tang Shihua, Futura Costaglione
