Lost 1.7 billion, Ryan Property Group reports its first loss in five years. Lo Ka-shui: Market correction is not over yet; urban renewal is the future development focus.

This article is sourced from: Times Weekly. Author: Zhang Yijing

Image source: TuChong Creative

“Over the past year, the operating environment for real estate has not been easy, with immense pressure, and consumer market growth has been extremely slow. As a developer, we also feel that the financing market is very difficult, so we need to pay close attention to liquidity.” Luo Kangrui lamented.

On the evening of March 26, the longtime Hong Kong-funded real estate developer Rui An Real Estate (00272.HK, hereinafter referred to as “Rui Fang”) held its 2025 results press conference. Senior management attending the meeting included Rui Fang’s chairman Luo Kangrui, vice chairman Luo Baoyu, financial controller and investment controller Sun Haohong, chief administrative officer Wang Ying, and the chief administrative officer of Rui An’s subsidiary Rui An New Town Co., Ltd., Zhang Bin.

According to the earnings report released earlier that afternoon, in 2025, Rui Fang’s revenue was RMB 4.093 billion, down 49.92% year over year; profit attributable to shareholders was -RMB 1.782 billion, marking the first loss in the past five years.

In response, financial controller and investment controller Sun Haohong explained that the loss this time was mainly due to valuation impairment of the company’s rental properties and impairment provisions for inventories, and was not a true loss. If those two factors are excluded, Rui Fang recorded core profit of RMB 397 million in 2025, down 12% year over year.

Looking ahead, Luo Kangrui believes that the adjustment in the real estate market has not yet come to an end and is likely to continue for two or three years, with the “bottoming-out” trend persisting. However, he also pointed out that there is still demand for high-quality properties, and urban renewal as well as redevelopment of urban villages will be key focuses for future development.

Last year’s property sales revenue was only RMB 500 million, with RMB 17.2 billion in sales on the books still to be recognized

By reviewing the financial report, it can be seen that the “culprit” behind Rui Fang’s near halving of 2025 revenue was the clear shrinking in the scale of property sales revenue.

In 2025, Rui Fang recorded property sales only RMB 499 million that were recognized as revenue, down from RMB 4.356 billion in 2024—a decrease of RMB 3.857 billion. The reason behind this is that in 2025, Rui Fang had no new residential projects completed.

Although revenue to be recognized was limited, Rui Fang performed well in new home sales. In 2025, Rui Fang achieved contracted property sales of RMB 7.916 billion, of which residential sales were RMB 7.246 billion and commercial property sales were RMB 670 million.

As described by Rui Fang’s chief administrative officer Wang Ying, last year’s contracted sales of Rui An mainly came from two projects in Shanghai—“Cuihu Tiandi · Liuhe” and “Wuhan Tiandi · Yunyue.”

Among them, for the villa and townhouse products of “Cuihu Tiandi · Liuhe,” due to their scarcity and the distinctive lifestyle they represent, they again drew high attention from high-net-worth customer groups and generated a larger volume of purchase intentions. All the villas and townhouses that had obtained pre-sale permits were sold out; the remaining villas that were still for sale can complete signing once their pre-sale permits are approved. As for “Wuhan Tiandi · Yunyue,” as the closing residential project of Wuhan Tiandi, its sales momentum after entering the market has also been very strong. By the end of 2025, the sell-through rate had already exceeded 72%, with transaction volume far surpassing other high-end residential projects in the same area. The project is now approaching sell-out.

Wang Ying disclosed that by the end of 2025, Rui Fang had locked in sales of up to RMB 17.231 billion to be recognized as formal revenue, to be delivered in 2026 and thereafter, and to be recognized in subsequent performance periods.

Commercial rents grow for three consecutive years

Compared with property sales, commercial rental income—another major core business for Rui Fang—looks even more impressive.

It is understood that in 2025, office building markets and retail property markets nationwide were both facing intense competition. Taking Shanghai as an example, data from JLL shows that office building rents in Shanghai during the year were RMB 5.2 per square meter per day, down 11.6% from the same period last year; for retail properties, rents for shopping malls in Shanghai’s core locations and in non-core locations fell by 4.3% and 6.4% year over year, respectively.

The financial report shows that in 2025, Rui Fang recorded rental and related income (including income from joint ventures and associates) of RMB 3.625 billion, up 2% year over year, maintaining growth for three consecutive years. Among them, property rental and related income from its headquarters base in Shanghai totaled RMB 2.826 billion, accounting for 78% of total rental income, up 3% year over year.

Among the many projects, rental and related income from Hongshou Plaza, which opened at the end of September 2023, rose 49% year over year, mainly driven by an increase in the office building portfolio’s occupancy rate. Rental and related income from Shanghai Tiandi increased 14% year over year, mainly benefiting from the opening of the Dongtai Li in Tiandi. Rental and related income from Panlong Tiandi increased 7% year over year.

However, even in a fiercely competitive market environment, Rui Fang has also been affected. The company also pointed out in its financial report that in 2025, renewal rents for both its retail properties and office buildings declined.

Regarding Rui Fang’s 2026 operating strategy for its commercial segment, Zhang Bin, chief administrative officer of Rui An New Town, said that the retail segment will continuously improve fundamentals such as operating revenue and customer foot traffic through diversified innovation, achieving win-win outcomes for tenants. For example in Shanghai, it can leverage inbound foot traffic to build retail differentiation advantages, while continuously rolling out cultural experience-type content that fits the characteristics of Tiandi to drive improvements in tenant mix. As for the office segment, it will prioritize improving occupancy rates, enhancing competitiveness through flexible leasing strategies and high-quality services such as customized renovations and sustainable office solutions, and continuously expanding value-added services beyond the available space.

Increasing investment in light-asset urban renewal

Looking back at prior financial reports, it can be seen that in recent years, Rui Fang’s land reserve in its headquarters base of Shanghai has been declining rapidly. By the end of 2025, the total GFA available for lease and for sale across the company’s development projects and projects to be developed in Shanghai was 169,000 square meters, whereas the figure was 2.08 million square meters at the end of 2020; over the past five years, it decreased by more than 1.9 million square meters.

In terms of project expansion, “light-asset strategy” became the choice for Rui Fang. At this results conference, management also acknowledged that, in the current market environment, a light-asset strategy can both balance Rui Fang’s investment of funds and capital, while maintaining its healthy expansion in scale.

In 2025, Rui Fang’s performance in light-asset expansion was also noteworthy. During the period, Rui Fang successfully added two light-asset projects: “Yongxinli,” a high-end residential project within the Shanghai Tiandi community, and “Shanghai Sānlín,” an urban village redevelopment project in Pudong New Area, Shanghai. The company’s actual interests were 15% in the former and 13.26% in the latter.

As Wang Ying disclosed, Yongxinli will be developed and operated under the Cuihu Tiandi brand. Currently, the relocation and resettlement work for the project has been fully completed. It is planned to formally commence construction in the first half of this year, and the overall completion is expected in 2031. Meanwhile, the Sānlín project is expected to be completed in 2035.

The latest financial report shows that, as of the end of 2025, the total number of Rui Fang’s light-asset reserve projects increased to 4, with total scale under construction and to be constructed of 1.22 million square meters of residential and 291,000 square meters of commercial.

It is understood that the four light-asset projects expanded by Rui An come from urban renewal and urban village redevelopment. In this regard, Rui Fang’s chief executive officer Zhang Bin explained that in recent years, the government has been stepping up efforts to redevelop urban villages. In 2025, Shanghai also issued a new three-year urban renewal plan and clearly stated that in 2026 it will launch an overall urban village redevelopment program, accelerating high-quality urban development. Against this backdrop, urban village redevelopment has become a focus of urban renewal.

“Panlong Tiandi is one of the successful examples of Shanghai urban village redevelopment that everyone is familiar with. It not only improves the environment of the area, but also effectively promotes the prosperity of the regional economy. The success of this project fully demonstrates Rui An’s outstanding capabilities in the field of urban village redevelopment, and it also gives us strong confidence in the prospects of similar projects such as Sānlín Tiandi and Zhaolou Tiandi.” Wang Ying said.