Live Performance Conference | Shui On Land Chairman Robert Kuok: By 2026, housing prices in core areas of Shanghai will stabilize first, and industry adjustments are still ongoing

“ This is a very difficult question to answer.” On the afternoon of March 25, Liukan Realty (00272.HK, share price HK$0.60, market cap HK$4.816 billion) chairman Luo Kangrui, when answering questions from a reporter from The Economic Daily (hereinafter referred to as the Economic Daily reporter) at an earnings call regarding issues such as whether the market is bottoming out, said, “Over the past year, property operations have been under tremendous pressure under the combined effect of multiple factors. Our view is that the industry adjustment is still ongoing, and it needs to speed up the search for an operational new model that can work with the new situation.”

In 2025, Liukan Realty achieved core profit of RMB 397 million. Driven by the impact of fair value changes of investment properties that are non-cash in nature and impairment allowance provisions for unsold inventories, the Group recorded a loss attributable to shareholders of RMB 1.782 billion.

As of December 31, 2025, the Group’s net asset gearing ratio was 52%. Cash and bank deposits totaled RMB 6.451 billion. During the year, the Group repaid on schedule the US$490 million senior notes that matured on March 3, 2025. Since 2021, the total amount of offshore debt repaid has reached RMB 48.6 billion, and the proportion of foreign-currency financing has fallen from 77% to 19%.

** Sold out of the Lu Tian Tianxia Style Villas in the “single-unit price of 311,000 yuan”**

“ The deep adjustment in the real estate industry will continue for another two to three years, and the bottoming-out trend will also persist.” Luo Kangrui responded to the Economic Daily reporter, “After the Spring Festival, Shanghai rolled out the ‘Shanghai Seven Articles’ for the property market. In the short term, it activated a round of transaction volume and also improved market sentiment. As a national economic hub, Shanghai continues to maintain a net inflow of population, so the foundation of homebuyer demand remains solid. Currently, prices of core assets in the mid-to-high-end segment are still firm, and buyers’ confidence is relatively stable.”

In 2025, including Shanghai, in first-tier and core second-tier cities, supported by improvement-oriented demand, high-end residential performance was clearly better than the overall market. Against this backdrop, in 2025 Liukan Realty recorded contracted sales of RMB 7.916 billion; there were also RMB 639 million in subscription sales, which is expected to be converted into contracted sales in the coming months.

Wang Ying, Executive President of Liukan Realty Co., Ltd., disclosed at the earnings call: “After the ‘Cuihu Tiandi Liuhe’ high-rise residential units sold well, its style villas and townhouse products have once again attracted strong attention. All villas and townhouses that have already obtained pre-sale permits are sold out, with an average price of RMB 311,000 per square meter; the remaining villas awaiting sale will be signed once pre-sale permits are approved.”

Luo Kangrui said, “I estimate that in 2026, home prices in Shanghai’s core locations will stabilize first, while non-core areas will continue the trend of selling at lower prices to increase volume.”

** Urban renewal and redevelopment of urban villages are the key focus areas in the future**

Luo Kangrui admitted, “The financing market is difficult, so as a developer, we are more focused on liquidity; as for the market itself, the adjustment has not yet ended and the process is relatively slow. However, despite market weakness, there is still demand for high-quality properties.”

The reporter noted that Liukan Realty maintained a cautious attitude toward short-term industry prospects. The management disclosed that it expects overall liquidity in the real estate industry may continue to tighten. In this environment, the Group will continue to adhere to prudent financial management principles, and at the same time use the best strategies to drive sustainable business growth.

Therefore, Luo Kangrui believes that urban renewal and redevelopment of urban villages are key priorities for future development.

Under the light-asset strategy framework, Liukan officially announced in November 2025 that it would participate in the urban village redevelopment project in the Sanlin area of the Pudong New Area in Shanghai. The “Zhaolou Xintiandi” urban village redevelopment project in Shanghai successfully obtained its first block of residential land in January 2026. This is another development milestone following the start of construction for public supporting facilities in July 2025. The management said that the entire project is planned to be fully completed in 2032. Management said it aims to seek the best balance between heavy-asset development and light-asset management to achieve the Group’s sustainable development.

Regarding the future national market, Luo Kangrui believes that among cities, the market trends of core cities and third- and fourth-tier cities will continue to diverge. First-tier and strong second-tier cities will have stronger resilience in areas such as industrial foundation and population resource concentration. However, most third- and fourth-tier cities will still face significant de-supply pressure. Within the same city, the price gap between core locations and non-core locations will further widen; prices of high-quality locations will remain high, and this will also become one of the important choices for capital risk avoidance.

“Based on the current market environment, the Group will continue to focus on opportunities for urban renewal in first-tier cities in the Yangtze River Delta and the Greater Bay Area, and will make Shanghai a key development region. Leveraging a clear strategy focus, a solid financial foundation, and strong brand strength, we are confident in proactively responding to short-term volatility and effectively capturing long-term development opportunities.” Luo Kangrui concluded.

The Economic Daily