Country Garden, once China's largest property developer by sales volume, is in the process of transitioning toward normal business operations following years of debt restructuring efforts, but continues to face significant challenges including legacy asset disposal and creditor negotiations, according to industry analysis published in early August.
The Road to Normalization
Since initiating its offshore debt restructuring in 2023 and completing a major onshore asset disposal program, Country Garden has made measurable progress in reducing its debt burden and stabilizing operations. The company has resumed construction on previously suspended projects and re-engaged with local governments on land development plans.
However, analysts note that Country Garden's transition is complicated by its exposure to hundreds of cities across China, its large inventory of uncompleted units, and the need to reach consensus with a diverse group of creditors spanning banks, bondholders, and suppliers.
Legacy Issues
Country Garden's massive land bank, built during the boom years of the 2010s, includes many projects in third and fourth-tier cities where market conditions remain challenging. Divesting these assets at prices acceptable to creditors has proven difficult, and the company has been forced to accept significant discounts on some disposals.
Industry Implications
The experience of Country Garden, and peers like Kaisa and Shimao that have also navigated or are navigating restructuring, highlights the complex and extended nature of China's property sector deleveraging. While top state-owned developers like China Overseas and Poly Property have thrived, private developers face a far more difficult path back to health.