CHINA Law and Practice Contributed by: Nancy Zhang, Xiaoying Tian, Qian Gu and Liangqian Ying, JunHe LLP
1. General 1.1 Main Sources of Law The laws promulgated at the national level include: • the Civil Code; • the Land Administration Law; • the Urban and Rural Planning Law; • the Construction Law; and • the Urban Real Estate Administration Law. 1.2 Main Market Trends and Deals During 2024, office space remained the most sought-after asset class in terms of transac - tion value in the real estate market of the PRC, with a total transaction value of RMB73 billion, representing 36% of the total transaction val - ue. Mixed-use complexes, apartments/hotels, and retail properties followed, with transaction values of RMB30 billion (15%), RMB28 billion (14%), and RMB25.9 billion (13%), respectively. Among major cities, Shanghai maintained its leading position in the bulk transaction mar - ket, with a total transaction value of approxi - mately RMB75.8 billion, representing 38% of the national total (source: Colliers International Group Inc, Review of Bulk Transaction Invest - ments in China’s Industrial and Commercial Real Estate Market in 2024, 23 January 2025). Notable transactions in 2024 include a devel - opment fund managed by ESR Group (01821. HK) divesting a portfolio of logistics assets in China valued at over RMB5.8 billion to its flag - ship RMB Core Fund. The portfolio comprises nine logistics properties located in Tier 1 and Tier 1.5 cities, including Guangzhou, Hangzhou, Shanghai and Suzhou. Additionally, Sino-Ocean Group transferred 64.79% equity interests and associated debt claims in the project compa - ny of INDIGO Phase II, a prominent commer -
cial complex in Beijing, to China Life Insurance and Swire Properties for a total consideration of RMB4 billion. China Life Insurance contrib - uted approximately RMB3.1 billion, acquiring a 49.895% stake, while Swire Properties invested around RMB900 million for a 14.895% stake. Despite a slight increase from last year, China sustained a remarkably low inflation rate in 2024 and continued implementing interest rate cuts throughout the year. However, the real estate industry did not experience a positive bounce back in 2024 (source: China Lianhe Credit Rat - ing Co., Ltd, Review of the Real Estate Industry in 2024 and Credit Risk Outlook for 2025, 31 December 2024). 1.3 Proposals for Reform On 6 July 2024, the National Development and Reform Commission (NDRC) issued the Notice on Fully Promoting the Normalized Issuance of Infrastructure Real Estate Investment Trusts (REITs), further institutionalising the issuance of infrastructure REITs and expanding the scope of eligible underlying assets. Elderly care facilities, rental housing, farmers’ marketplaces and spe - cialised marketplaces such as home furnishing, building materials and textile marketplaces, and certain hotel and office components which are physically inseparable from retail properties are now permitted as underlying assets. 2. Sale and Purchase 2.1 Categories of Property Rights There are two main categories of property rights under PRC laws. • Ownership right is the right to possess, use, receive proceeds from and dispose of the properties of the owner. Under PRC law, land
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